Activist Hedge Fund Flexes Its Muscles At Nautilus

Jan 2 2008 | 12:39pm ET

New York-based hedge fund Sherborne Investors has won its proxy battle for control of fitness equipment maker Nautilus.

The Vancouver, Wash.-based concern, which markets the Bowflex line of exercise machines, among others, acknowledged that Sherborne’s four candidates had won election to its seven-member board, on Dec. 18. Among those failing to win reelection were Chairman and CEO Robert Falcone.

The new board members elected Sherborne managing partner Edward Bramson chairman. But in spite of their victory, and the vitriol generated by the proxy battle, the new Bramson-led board did not dismiss Falcone from his positions as president and CEO.

“We appreciate the support of our fellow shareholders and look forward to working with the new board and management to implement an effective strategy at Nautilus to return it to profitability and establish a platform for future growth,” Bramson said in a statement.

Nautilus would not say how large the Sherborne nominees’ margin of victory was.

In addition to Bramson, Sherborne’s Gerard Eastman, former ICOS Corp. CFO Michael Stein and former PetsHotel general manager Richard Horn joined the company’s board.

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