Statement In Regard To Mr. Pechter And Value Line's Asset Management Business
NEW YORK, Sept. 7 /PRNewswire/ -- Value Line, Inc. (Nasdaq: VALU) made a statement today in regard to its asset management business. The Directors of Value Line, Inc. have reviewed a letter from Richard Pechter received by the Company's acting Chief Executive on September 3, 2010 in which Mr. Pechter proposed to match the terms of the proposed restructuring of Value Line's asset management business approved by Value Line's Board on July 20, 2010 and to pay $250,000 to the Company. Mr. Pechter's letter states that his proposal will remain valid until 5:00 p.m. on September 10, 2010. Counsel for the Company discussed with counsel for Mr. Pechter his interest in obtaining a copy of non-public draft documentation for the transaction approved by the Board and summary financial information regarding the business.
The Company offered to provide this information if Mr. Pechter would sign a confidentiality agreement closely paralleling those signed by the nine organizations that received confidential information earlier this year to see whether they were interested in acquiring the business. Despite the Company's good faith effort to accommodate Mr. Pechter throughout the Labor Day weekend, he declined to sign the proposed confidentiality agreement, so the Company has not provided the information.
The Board noted that Mr. Pechter waited for over 40 days after the Company's announcement of the restructuring approved by the Board to make a proposal even though cognizant of the limited time frame available for the Company to obtain the required approvals from the Value Line mutual fund shareholders.
The Board has also concluded that further negotiation with Mr. Pechter is not warranted, given the risk that the process of identifying and vetting substitute independent shareholder-trustees acceptable to the Board will cause an unacceptable delay in completing a transaction prior to the SEC deadline of November 4, 2010.Furthermore, the Board is concerned that Mr. Pechter may be more interested in waging a media campaign than in assisting the Company of which he is a shareholder and believes that he may not appreciate the nature of the "sweat equity" profits interests provided to the current manager and future shareholder-trustees of the business under the proposal approved by the Board in July.
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