Furmanite (NYSE: FRM) has been facing pressure from a small activist group and is the latest to cave in, offering board seats to avoid a proxy battle. Furmanite is a $300 million market cap company offers engineered services for on-site industrial plant maintenance.
The company has been delaying its annual meeting for several months now, but the showdown is set for June 30. The Houston-based company was catching heat for planning to hold its annual meeting in Delaware to make it harder for an activist to win the proxy battle.
There’s been a proxy battle waging for over a month, but the company recently caved to activist investor Mustang Capital, which owns a reported 4% of Furmanite. The board will now include three nominees from the activist investor group and the board head is stepping down. The company will also pay Mustang Capital over half a million dollars in expense reimbursement.
The activist group has taken Furmanite to task over poor decisions and cronyism. The company just got a new CEO in January and he’s trying to fend off attacks. He’s called the activist investors out for trying to gain control of the company without a long-term plan.
CEO Joe Milliron has said that there could be a premium offer from a potential buyer for the company, but the deal is still several months off.
Other major funds invested in Furmanite include Ariel Investments heavily invested here, with a 7.1% stake. As well, Rutabaga Capital owns 4.7%, GAMCO owns 4.1% and Royce & Associates with 4%.