Troubled diagnostic systems maker Angeion Corp. (NASDAQ: ANGN) has restructured its board of directors to quell a proxy fight with activist shareholder BlueLine Partners LLC.
Danville, California-based BlueLine Partners, which owns 7.2 percent of Angeion’s outstanding shares, was gathering shareholder signatures in an effort to remove Angeion’s directors — whose “advice and consent” style of corporate governance is failing to turn around the company — and replace them with a new board nominated by shareholders, according to a statement and regulatory filing from BlueLine.
“The general market has utterly lost interest in Angeion and is giving its objectively sound business almost no economic value,” BlueLine said in the filing, noting that Angeion’s stock price has dropped 67 percent since the beginning of 2007. While Angeion’s stock price swooned, the company more than doubled the pay for its directors, according to the filing.
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“There are good people on Angeion’s board, but they have not been effective in representing or pursuing the interests of the company’s shareholders,” BlueLine said. Usually, there is little shareholders can do about such a situation. However, Minnesota law provides 10 percent shareholders the right to call a special meeting of shareholders for any purpose, including changing the composition of the board of directors, the firm said.
BlueLine was wooing shareholders to gain the 2.8 percent of outstanding shares it needed to be able to call the special meeting to oust the board. But the meeting’s off now. On Aug. 18, the investment firm agreed with Angeion to “reform” its board of directors.
As a result, Angeion replaced board chairman Dr. K. James Ehlen with Mark W. Sheffert, chairman and CEO of Manchester Cos. who was chairman and director for Medical Graphics Corp. when Angeion acquired it in 1999. That year, Sheffert was recognized as one of Minnesota’s Outstanding Directors, Angeion said.
The diagnostics company also elected Robert Munzenrider as director and chair of the board’s audit committee. Over the last 40 years, Munzenrider has held executive and financial leadership positions at companies including St. Jude Medical.
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As part of its agreement with BlueLine, Angeion asked Scott Shuda, John Baudhuin, Philip Smith and Angeion CEO Rodney Young to continue as directors, and accepted the resignations of Ehlen, Paula Skjefte and John Penn. Shuda is a BlueLine principal who joined the board in March.
The company now has six directors, five of whom are considered independent. The board plans to add a seventh director soon, the company said in a release.
