Stewart Reaches Settlement with Bulldog Investors

Mar 27 2015 | 6:30pm ET

Property title giant Stewart Information Services has reached an agreement with activist shareholder Bulldog Investors to nominate a new, independent board member, among other provisions.

The independent nominiee will be James Chadwick, director and portfolio manager of Ancora Advisors. Arthur Porter, a Stewart director since 1993, will not be renominated, and his tenure will end this year.

In additon, Stewart will submit a new shareholder proposal that will alter the company's stock structure. In a statement released today, the company said: 

"Approval of the stockholder advisory proposal would not itself eliminate the company’s dual-class capital structure; but rather it would be an advisory recommendation to the board to submit such a proposal to the stockholders in the future. Since the board desires to hear the views of its stockholders concerning the dual-class capital structure, it is not making a recommendation to stockholders regarding votes on this proposal."

The deal appeases activist hedge fund Bulldog Investors, which owns a 5% stake in the firm. In return, Phil Goldstein's shop will not solicity proxies and will vote for the firm's “say-on-pay” proposal, which provides shareholders with a voice on executive compensation. It also agreed to a standstill provision.

“We think Stewart has great untapped potential and we believe that stockholders will benefit from Jim Chadwick’s experience and fresh perspective on the Company’s Board. We look forward to significantly improved results from Stewart in the year ahead as the management team and Board work together to enhance shareholder value,” said Goldstein, principal of Bulldog Investors, in a statement.


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