Storer Says Majority of Board Was Reelected

Storer Communications said Tuesday that a preliminary report showed a majority of the current board of directors has been reelected, keeping control of the embattled company out of the hands of dissident shareholders.

But Storer officials disputed the Friday report by C. T. Corp. of Wilmington, Del., that said shareholders reelected five of the nine incumbents in the May 7 annual meeting.

The remaining four seats went to nominees of a group led by New York-based Coniston Partners, which owns 5.3% of Storer and wants to liquidate the communications company, Storer said, citing the preliminary report.

In a statement released by Storer on Tuesday, however, company officials said they believed that C. T. “erroneously tabulated votes by the holders by more than 500,000 shares, and that a proper tabulation of those votes would result in the election of six incumbent directors.”

The company said it received a temporary injunction in Ohio state court in Cleveland Friday, preventing C.T. inspectors from certifying the results and keeping Coniston nominees from taking office.

Coniston, in turn, filed an appeal with the U.S. District Court in Cleveland. As of Tuesday evening, no action had been taken.

Official results of the shareholders vote had been scheduled to be released Wednesday when Storer was set to resume its annual meeting at its Miami headquarters.

Storer spokesman Andy Holdgate said he didn’t know specifically how the 500,000 shares allegedly were mistabulated, but he added that some may not have been counted. He also declined to say how many votes were cast.

An officer of C. T., who refused to identify himself, said the company has no comment on Storer’s allegations.

“We’re an independent company. We find it’s not in our practice to issue any statements,” the officer said.

Augustus K. Oliver, a general partner for Coniston, said Storer’s claims were unfounded.

“They hired C. T. Corp., which is the best-known company in the country that handles the counting of votes,” Oliver said. “As far as we’re concerned, they did an outstanding job.”

Storer needs to maintain majority control of its board of directors in order to complete a $1.64-billion leveraged buy-out agreement with the New York investing firm of Kohlberg, Kravis, Roberts & Co.

The board-approved agreement calls for Storer, which owns seven television stations and 600 cable-TV franchises in 18 states, to merge with KKR Holding Inc., a corporation recently formed by Kohlberg, Kravis. Storer’s management would continue to run the organization.

Under terms of the agreement, each Storer common share would be converted into $75 cash, $25 face value of preference stock and warrants to purchase common stock in the new company.

Kohlberg, Kravis had said the agreement automatically would be terminated if fewer than five incumbent directors were reelected.

Oliver said that, even though Coniston reportedly had not obtained enough seats to wrest control of the company, the four elected members, of which he was one, would try to direct the board to look for other potential buyers for the company.

Coniston maintains that Storer has a liquidation value of between $90 and $100 a share.