Steel Partners fired five shots at body armor maker Point Blank Solutions, and its aim was true.
Pompano Beach, Fla.-based Point Blank said yesterday that the activist hedge fund’s five nominees were elected to the company’s seven-member board of directors by a wide margin. The catastrophic defeat for Point Blank—the company’s nominees received just 14% of the vote, compared to 65% for Steel’s nominees, the hedge fund said—comes at its first annual shareholders meeting in more than three years.
Point Blank had tried to delay the meeting for as long as possible, until a Delaware judge ordered it to hold the meeting as scheduled earlier this month.
“Today’s vote shows that shareholders will not sit quietly by while shareholder value deteriorates,” Warren Lichtenstein, managing member of Steel Partners, said in a statement issued after his firm’s victory. “We now look forward to working with the rest of the board and the company’s management to unlock value for all stakeholders.”
In the statement, Steel said it would continue Point Blank’s ongoing exploration of alternatives to enhance shareholder value, including a possible sale.
“We continue to believe that Point Blank should not remain a stand-alone company on uneven terms against much larger competitors in a weakening market,” Steel, which owns a 9.6% stake in Point Blank.
Lichtenstein and other Steel members were not among the nominees proffered by the hedge fund. The new Point Blank board members include three longtime executives from the security and defense sectors, a former U.S. Air Force chief of staff and a managing director of a management services company owned by Steel.
After losing its bid to further postpone the long-delayed meeting, Point Blank leadership seemed resigned to a Steel victory in the proxy contest.
“The next leadership of the company must not only negotiate the best deal or strategic option, they must maintain and enhance value,” CEO Larry Ellis said in a speech at the meeting, before the results were announced. “I am not anti-Steel. I am pro-shareholder.”