Voce Capital Management has accused Argo of underhanded tactics that the firm states underscores its “culture of deception and entrenchment”, as two states revoke their prior approvals of the filing of Voce’s definitive proxy statement.
The latest twist in the ongoing saga between the companies has cast doubt over Voce’s ability to proceed as planned, stating that it has no choice but to withdraw nominations for 2019 Annual Meeting while at the same time urging shareholders to vote against Argo’s nominees on the White Proxy Card.
Voce accused Argo’s Chief Executive Officer (CEO), Mark E. Watson III of perpetuating “shockingly high and shockingly inappropriate” corporate expenses over the last decade.
Voce then said it intended to nominate what it described as four highly-qualified, independent Director candidates. In response, Argo called on its shareholders to back its own nominees and vote down Voce’s nominations, describing the proxy contest as an attempt to push a “short term agenda.”
Argo recently received a public backing of its Director nominees from the Institutional Shareholder Services (ISS), while proxy advisory firm Glass Lewis & Co. sided with Voce in its ongoing dispute with the specialty re/insurer.
In a statement released today, Voce says that earlier this year, it “sought and obtained regulatory approval for its proxy solicitation at Argo from all relevant state Departments of Insurance (DOI)…As a result, every state – Illinois, New York, Ohio, Pennsylvania and Virginia – granted approval for us to proceed prior to the filing of our definitive proxy statement on April 12, 2019.”
However, two states recently advised Voce that they have revoked their prior approvals. The latest state to do so was Virginia, and Voce says that “Argo’s active role in lobbying the various DOI is clear and irrefutable.”
Adding: “We believe that the officials reversed their previously well-founded positions as a result of Argo’s misinformation. In fact, Virginia explicitly stated in its letter to us that it had ‘considered additional materials and information provided by Argo’ in rescinding its previous approval.
“Argo’s actions are reprehensible. Unfortunately, this behavior is not surprising, and it underscores everything we suspected about the Company – including its penchant for using underhanded tactics and manipulating its complex corporate machinery for the benefit of the Board and management at the expense of shareholders.”
Voce describes the latest, last-minute developments as “disturbing” and warns that the implications of this “should send a chill down the spine” of company shareholders.
Ultimately, Voce has decided to withdraw its nominations for election of directors at the Annual Meeting, to cease soliciting proxies therefor.
“In the meantime, we plan to register our dissatisfaction with the Company’s outrageous actions by voting AGAINST the election of Argo’s five Class III directors on the Company’s WHITE proxy card. At this time, many of the Company’s largest shareholders have yet to cast their votes, and we encourage them to follow our lead and withhold their votes on the Company’s card.
“Moving forward, we are evaluating all potential legal remedies for this situation, including potentially requisitioning a Special General Meeting. We continue to believe in Argo’s potential to deliver far greater value for its shareholders, and look forward to continuing our efforts to right the ship at Argo,” says Voce.