CHICAGO-The Financial Relations Board, the Chicago-based investor relations firm that signed on last March to assist the management of Big O Tires Inc. in a proxy dispute, is severing its relationship with the company. Both admit the move came somewhat unexpectedly after Cooper Tire & Rubber Co., a longtime client of The Financial Relations Board (FRB), felt it could be a conflict of interest for FRB to represent two companies in the same industry, according to Gary Strong, FRB's vice president.
He said his company ``regretfully has had to sever its relationship with Big O,'' but promised, ``We won't leave Big O in the lurch'' and will work with that firm until a replacement agency is found.
FRB handles a company's investor relations, including the preparation of quarterly and annual reports and financial news releases.
After an extensive search, Big O hired FRB last spring while in the throes of a squabble with its second-largest shareholder, Kenneth W. Pavia of Balboa Investment Group in Newport Beach, Calif. A measure he proposed-for which he sought and eventually received enough proxy votes-specified that Big O hire a nationally recognized investment banker to explore alternatives for enhancing the value of the company.
Mr. Strong said FRB was hired to handle the proxy issue and later asked to continue helping the firm with its investor relations.
He called this ``a time of transition'' for Big O and said ``some work needs to be done yet to fulfill the requirements that the shareholders levied upon the company, its management and board.
``FRB is going to make sure we'll see them through that project.''
Some direction from Big O's investment banking firm, Paine Webber Inc., is expected in September, he added.
One of the nation's largest investor relations firms, FRB has represented Cooper Tire for more than 17 years, Mr. Strong said.
``It's unfortunate that this occurred. But we let Cooper know we would resign from the Big O account. And we will help Big O find a replacement for FRB.''
While acknowledging Big O is looking for another firm, John Adams, Big O executive vice president and chief financial officer, said he would not discuss details until a replacement was found.
He said Big O President and CEO Steven P. Cloward has talked with some firms, and ``we'll have presentations from a couple of them on Sept. 2.''