Friday, May 15, 2009

Board election fight shaping up at Forzani Group

Calgary-based sporting goods retailer Forzani Group Ltd. on Thursday urged shareholders to reject a minority shareholder's bid to get two nominees elected to the company's board of directors.

On Wednesday, Crescendo Partners, a New York-based investment company that owns 5.1 per cent of the Class A shares of Forzani, said it has nominated Barry Erdos, the chief executive officer of toy company FAO Schwarz, and David Sgro, a managing director at the fund, for election to Forzani's board.

Crescendo also will be recommending shareholders vote for six of the incumbent directors nominated by Forzani management.

The election is slated for June 10 at the company's annual meeting.

"As a matter of good governance, [Forzani Group's] board undertook a clear and transparent process to consider Crescendo's demands," company chairman John Forzani said in a written statement.

"Based on a number of factors, the board unanimously determined that the company and its shareholders would be best served by denying Crescendo's extraordinary demands,' he said.

In a letter to Crescendo, Forzani said the company's current board believes shareholders will support the company's nominees.

In a release issued Wednesday, Eric Rosenfeld, the managing member of Crescendo, said the only intention in putting forward the nominees was to improve the board.

"Over the past two months, we made an effort to avoid a proxy contest and to reach an amicable resolution with the company to have nominees added to the board," Rosenfeld said.

"Forzani rejected the concept of any Crescendo nominees even though the company had an open board position to fill," he said.

Forzani stock rose 96 cents to $14.01 in TSX trading.