Breeden Battle For H&R Block Heats Up

Aug 1 2007 | 12:29pm ET

The battle between H&R Block and hedge fund Breeden Partners is now in the hands of the shareholders, and the tax preparation company is beseeching investors to keep a former Securities and Exchange Commission chairman off of its board of directors.

That former SEC chief, of course, is Richard Breeden, founder of the eponymous Greenwich, Conn.-based hedge fund engaged in a proxy battle with the Kansas City-based firm, pushing it to sell its year-old banking division. Breeden and two associates are seeking election to H&R Block’s board of directors.

In a letter to shareholders accompanying its proxy materials, H&R Block CEO Mark Ernst said Breeden offered no plan to boost shareholder value, other than selling the bank, which he called a key part of building its tax business.

“It is unfortunate that a dissident hedge fund, Breeden Partners, has chosen to launch a costly and distracting proxy contest,” Ernst wrote.

In regulatory filings, H&R Block said its strategy is the right one to improve returns, a sentiment echoed in Ernst’s letter. The CEO told shareholders to expect better things when it exits the sub-prime mortgage market: The firm agreed in April to sell its Option One Mortgage Corp. to hedge fund Cerberus Capital Management.

Last week, Breeden, who headed the SEC during George H.W. Bush’s presidency, said the proxy battle was not about dissidence.

“The issue in the pending proxy contest for the board at H&R Block Inc. are the company’s lagging performance, its poor return to stockholders compared to market averages during recent years and its future strategy for growth,” he said.


In Depth

Q&A: Brevan Howard’s Charlotte Valeur Talks Strategy

Sep 18 2014 | 11:18am ET

Charlotte Valeur chairs the board of Brevan Howard Credit Catalysts, an LSE listed...

Lifestyle

Hedgies Rock Out For Children's Charity

Sep 15 2014 | 8:40am ET

It's that time of year again—when hedgies trade in their spreadsheets for guitars...

Guest Contributor

Volkered: How Financial Sector Reforms are Creating Opportunities for Hedge Funds

Sep 16 2014 | 11:28am ET

New regulations have dramatically curtailed proprietary trading activity in investment...

 

Editor's Note

    Get A Sneak Peak Of The Alpha Pages

    Aug 25 2014 | 11:21am ET

    As many of you know, FINalternatives was recently acquired by the owners of Futures magazine, a firm called The Alpha Pages LLC. Today marks the soft-launch of a new sister site for both publications. As its name suggests, The Alpha Pages will cover all types of alternative investments, going far beyond the more well-known ones such as hedge funds and private equity. Read more…

 

Futures Magazine

September 2014 Cover

The London Whale: Rogue risk management

Credit default swaps brought down the London Whale and cost JPMorgan $6.2 billion. Here is how it happened.

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.