Wednesday, February 11, 2009

Cleveland IT Contractor negotiating w/Ramius

Agilysys, Inc., an IT contractor headquartered in Ohio (Nasdaq: AGYS), faces a proxy contest from Ramius LLC, in connection with the company's annual meeting scheduled for March 26.

Three members of Agilysys' (staggered) board will stand for re-election at that meeting. The Ramius/challenge slate consists of: John Mutch; Steve Tepedino; James Zierick.

Their grievance? In the words of their proxy statement: "In light of the Company’s continued poor operating performance, we believe that it is imperative that management and the Board immediately commit themselves to: realigning the cost structure of all three business units to achieve margins on par with industry peers;
significantly reducing corporate overhead; and refraining from making any further acquisitions."

It appears that negotiations are underway. In a statement, Agilsys' chief executive, Martin Ellis, said recently: "We are always willing to work with shareholders and on many occasions we have met with Ramius representatives to conduct negotiations to avoid a potential proxy contest. We hope these discussions can continue in good faith."

The negotiations are aimed at a "standstill agreement." Not, in other words, making Ramius happy but giving it enough in terms of board representation so it will agree to a standstill into 2010. This seems likely to involve conceding two of the three positions now contested, which would represent 2/9ths of the overall board.

The three incumbents each, pending any such dea, seeking re-election are: Thomas A. Commes; R. Andrew Cueva; Howard V. Knicely.

No comments: