4 Rival Board Candidates Would Be Open to Takeover Offers : Coniston Pushes Shareholder Revolt at Gillette
Coniston Partners said Friday that it wants to unseat four Gillette Co. directors, including the chairman and president, and have its own nominees elected so it can influence policy, particularly in respect to selling the company.
But the world’s largest maker of razor blades said it will resist the Coniston move to change the board at the upcoming annual meeting, scheduled for April 21.
Coniston, a New York investment partnership which last week said it holds 6.8% of Gillette’s stock, has criticized Gillette’s insistence on rejecting takeover bids. It said it intends to solicit proxies from other shareholders in support of its nominees.
Coniston’s style is not to take over a company itself, although it has reserved the right to buy more Gillette shares. But as a big shareholder, it can influence the company’s actions.
Even if its candidates are elected, Coniston would be unable to take control of Gillette’s board because only a third of the seats are up for election in any year. But analysts say a Coniston victory could pressure the board to consider a merger.
Keith Gollust, a principal in the partnership, said Gillette’s takeover defenses essentially gave its board of directors unilateral power to accept or reject any offers.
Andrew Shore, who follows Gillette for the investment firm Shearson Lehman Hutton, said proxy fights are difficult to win, but in this case Gillette management would have its hands full.
“We will resist vigorously any effort which is contrary to the interests of all stockholders,” Gillette Chairman Colman M. Mockler Jr. said in a statement.
Coniston said it will nominate Gollust, Paul Tierney and Augustus K. Oliver, of the investment firm Gollust, Tierney and Oliver, and David H. Strassler, former chairman of UA-Columbia Cablevision, for election as Gillette directors.
Boston-based Gillette has a 12-member staggered board, with only four spots open at the April annual meeting, Gollust said. Anyone wanting to nominate directors has to put up four names, and the entire slate is accepted or rejected, he said.
Seats held by Mockler, President Joseph F. Turley and two outside directors are the ones up for re-election.
Gollust said that if he and his partners were on the board, they would be able to influence discussions when a bid is received.
Unknown is the role that Revlon Chairman Ronald O. Perelman could play in the future of the company he has so keenly tried to acquire in the past.
The company has rebuffed several buyout offers from Revlon Group, a move that Coniston criticized. The latest--for $5.4 billion-- was spurned late last year.
