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May 2, 2011 /PRNewswire/ -- FrontFour Master Fund, Ltd., an affiliate of FrontFour Capital Group LLC (collectively, "FrontFour"), today commented on the report issued by Institutional Shareholder Services (ISS) in connection with the election contest at the upcoming annual meeting of Fisher Communications (NASDAQ-FSCI) to be held on
May 11, 2011. While disappointed with ISS's overall recommendation, FrontFour is pleased that ISS recognizes that the current Board and senior management have failed to enhance stockholder value and that ISS highlights in its report several of the same serious concerns that FrontFour has been expressing to stockholders during this election contest. In its analysis, ISS noted:
On the Company’s Poor Performance
"The company has clearly struggled to deliver shareholder return, down 49.2% between October 2005—when the board brought in the current CEO—and Dec. 31, 2010—the last day of trading before Huntingdon announced it had made an unsolicited offer."On the Company’s Lagging its Broadcast Television Peers
The Company’s performance between
October 2005 and
December 31, 2010 is
“markedly worse than television peers, which were down 23.7%.”On the Company’s Poor Corporate Governance Practices"More concerning, in our view, are actions the board took in April 2007, apparently in response to GAMCO increasing its stake, to increase from 20% to 25% the threshold for shareholders to call a special meeting, and to raise to two-thirds the threshold for shareholders to amend the bylaws. It remains an open question whether such actions are really for the benefit of all shareholders or the incumbent board.""Similarly, in 2009 shareholders approved a FrontFour ballot proposal to declassify the board. In its December 2009 meeting, the board unanimously rejected declassification, and has since noted that the shareholder proposal was only approved by 0.1% of votes cast. Arguing that the margin of victory somehow throws the victory itself into doubt may be one of the least helpful things a board can do for its shareholders: from a governance perspective, the most salient fact would seem to be that a majority of shareholders did support the proposal."On the Company’s Failure to Successfully Market Fisher Plaza"The company owns a 300,000 square foot office and data center complex in downtown Seattle, a clearly non-core asset which it marketed unsuccessfully in 2008."FrontFour Urges Stockholders Not to Allow the Current CEO & Board to Embark on Another Acquisition Spree
FrontFour further noted today its serious concern that Fisher's current CEO and Board intend to embark on another acquisition spree with stockholder capital.
Importantly, in the Company's letter to stockholders dated April 29, 2011, the Company made no attempt to dispute FrontFour's assertion that the management team and Board are looking to make acquisitions. If Ms. Brown is confident in her strategic plan, then why has she not purchased a single share of Fisher stock with her own capital? We question whether her interests are aligned with stockholders.
While ISS highlights that Fisher unsuccessfully marketed Fisher Plaza in 2008, FrontFour reiterated that its highly qualified nominees are committed to conducting a robust analysis of the current operations to cut costs, while simultaneously focusing on all potential strategic alternatives to maximize stockholder value -- including the current review of Fisher Plaza.