War of Words Escalates in the Fight for Oak Industries
Charges, countercharges and a possible court fight surfaced Friday in the increasingly bitter proxy fight that Washington-based merchant banker Roderick M. Hills is waging for control of Oak Industries.
Oak Chairman E. L. McNeely on Friday initiated the latest exchange by insisting that Hills, a former U.S. Securities and Exchange Commission chairman, has tried to mislead Oak shareholders about the San Diego-based company’s financial health. McNeely branded Hills’ proxy solicitation campaign a “public relations effort . . . (that) is marked by a number of distortions, a tactic that is unfair to all Oak stockholders.”
McNeely said Hills wants to turn Oak, which owns several unrelated manufacturing companies, into a merchant banking firm that would buy and sell widely diverse companies.
Hills on Friday described McNeely’s allegations as “badly and intentionally misleading . . . . The notion that I’m some sort of willy-nilly merchant banker is crazy.
“In his four years (at Oak), Ed has sold or offered for sale far more than 50% of Oak’s traditional businesses,” Hills said. “He’s the one that has (shown) totally no discipline” in determining Oak’s strategy.
In a related action Thursday, MIM Ltd., a British firm that is Oak’s largest shareholder, asked a Delaware judge to protect its right to vote for Hills’ group of directors during Oak’s annual meeting in San Diego on Tuesday.
MIM, which holds about 25% of Oak’s stock, went to court “as a protective action,” according to Steven Wilcox, a Boston attorney who represents MIM. The British company filed after Oak “threatened not to count MIM’s vote during the upcoming annual meeting,” according to Wilcox.
McNeely on Friday described MIM’s previously announced decision to support Hills’ proxy slate as an attempt to “short-circuit” an agreement that Oak and the British company had signed in January. That agreement prohibited MIM from taking sides in a proxy solicitation, McNeely said.
William Eberle, a Boston executive who is one of three MIM representatives on Oak’s board of directors, on Friday denied that MIM played an active role in Hills’ proxy solicitation. MIM decided to cast its vote for Hills’ slate because it was “in the best interest of all of Oak’s shareholders,” Eberle said.
“The notion that these people can’t vote their stock is bizarre,” said Hills, who maintained that his group had not solicited MIM for its support.
Hills, whose wife, Carla, is the Bush Administration’s special trade representative, joined Oak’s board in 1985 at McNeely’s request.