Activist investors are seeking shareholder support to elect two new directors to Argo’s Board in order to address what they label as “years of underperformance and poor decision-making” at the company.
Capital Returns Master, Ltd., a Cayman Islands exempted company, and other participants want to see the new directors approved at Argo’s upcoming 2022 annual general meeting.
They claim that the Board needs new directors to help ensure that decisions relating to the Argo’s strategic review are being made and that the company is being run in a manner consistent with sharholder’s best interests.
“We believe that shareholders have lost confidence in this Board and in this management team’s ability and willingness to take the actions necessary to unlock value for shareholders,” Capital Returns wrote in a letter to shareholders.
“That is why we are seeking to add two truly independent, highly qualified directors, who are committed to exploring all opportunities for value creation—including by pursuing a sale of the whole Company—while serving the best interests of all shareholders in the boardroom.”
Earlier this year, Argo confirmed that its board of directors had begun to explore ‘strategic alternatives’ including a potential sale, merger, or other strategic transaction, and also said that it had “interviewed and is in the process of evaluating” two director candidates for its board, nominated by Capital Returns.
But now, six months on, investors are seeking shareholder support to force Argo’s hand, possibly due to a lack of progress in these negotiations.
“We believe that the Board will benefit from the addition of independent directors, one of whom has experience as a former CEO of a successful public insurance company, and both of whom have extensive transactional and operational insurance industry experience, critically needed skill sets and a shared objective of enhancing value for the benefit of all Argo shareholders,” Capital Returns wrote.
“The individuals that we have nominated are highly qualified, capable and ready to work collaboratively with their fellow directors to explore all options to best serve the interests of all shareholders of Argo,” it continued.
“In light of the Company’s poor financial and longstanding stock price underperformance under the oversight of the current Board, we strongly believe that the Board requires additional skills and expertise to ensure that the Company is configured and operated in a manner that maximizes value for shareholders. We believe that the Board will benefit from our nominees’ financial and insurance expertise as well as their track records of value creation.”
