Tuesday, October 30, 2007
Washington Group International today announced that it had postponed its shareholder meeting from today until November 9, 2007. The meeting is being held to vote on the proposed acquisition of Washington Group by URS Corporation. In WGI's words, "[t]he meeting has been postponed to allow for the solicitation of additional votes in favor of the transaction in light of the fact that the transaction has, to date, received insufficient votes for approval."
We've now seen at least two postponements of shareholder meetings (Topps and here) since Strine's recent decision in Mercier, et al. v. Inter-Tel. Inter-tel permitted a board to to post-pone its shareholder meeting itself in order to gain time for stockholders to approve a proposed takeover transaction. Strine permitted this postponement despite the almost certain defeat of the takeover proposal if the meeting were not postponed (for a more thorough explanation of Inter-tel and its meaning for Blasius review see my post here). In both Topps and the Inter-tel deals the maneuver was ultimately successful and the deals approved. I expect it to be the same here. And again the proxy advisory firms are split -- Glass Lewis, Proxy Governance, and Egan-Jones -- have recommended that in favor of the transaction. Institutional Shareholder Services* -- has recommended against. Someone would write a paper on this phenomenon and the reasons for it.
NB. The post-ponement here is different than the successful strategies used by Bioenvision and OSI to gain approval of their takeovers -- to instead adjourn the shareholder meeting. For an explanation of the two different strategies and the pros and cons of each see my post here.