In response to a letter from shareholders criticizing the company’s “ineffective and stagnant” board of directors, Ottawa-based Espial (TSX:ESP) has added a new independent member to assuage investors’ concerns.
Vantage Asset Management, a Toronto-based investment management firm that holds 9.5 per cent of Espial’s shares, sent a letter last week to shareholders ahead of the firm’s annual general meeting on June 13. The letter said that Vantage still believed Espial to be a “compelling investment opportunity,” but that long-standing board members who hold little stock in the company were a detriment to the firm’s future.
Vantage nominated three new board members in lieu of three of Espial’s long-standing directors and encouraged shareholders to use their proxy to vote for its slate.
Espial, which develops television interface platforms and viewing experience software, issued its own release advising shareholders to disregard Vantage’s letter. In a phone call with OBJ yesterday before Tuesday morning’s agreement was announced, CEO Jaison Dolvane said he was confident Espial’s slate would move forward, saying Vantage’s critiques were “pretty weak.” He said the two firms would find a compromise that would work for both sides.
Vantage’s proposed slate has now been rescinded after the firm reached an agreement with Espial to add to the board Brian McLaughlin, a Toronto-based investor with 30 years in capital markets including leadership roles at Gordon Capital and Raymond James Securities. Mr. McLaughlin was not one of the three proposed board members Vantage had initially put forward.
Vantage will also work with Espial to add another new, mutually-agreed upon board member at the company’s AGM in 2018.
“Vantage and Espial’s board have worked collaboratively in this process and believe the agreement positions the company for a stronger future,” said Vantage managing partner Mark Tredgett in a statement.
“Together with the support of our large shareholders like Vantage, we are committed to continuing Espial’s vision of being a trusted partner to our customers. We are excited about the recent changes to the company’s board and welcome Brian’s future contributions,” said Espial chairman Peter Seeligsohn in a statement.
Under the agreement, Vantage has agreed to vote its shares for Espial’s nominees.
Espial’s shares ended the day up 1.63 per cent o $2.50 on the Toronto Stock Exchange.