PHILADELPHIA (June 12, 2015) — Pep Boys – Manny, Moe & Jack has avoided a proxy fight with its largest shareholder, GAMCO Asset Management Inc., by agreeing to nominate three directors recommended by GAMCO to be voted on at Pep Boys' annual meeting July 10.
Rye, N.Y.-based GAMCO, which owns 18.9 percent of Pep Boys' stock, originally had proposed nominating a slate of four candidates, telling shareholders it was doing so because it had “little confidence that [Pep Boys'] board, as currently composed, is committed to taking the necessary steps to enhance shareholder value….”
GAMCO said it believes its nominees “will bring significant and relevant experience, new insight and fresh perspectives to the board.”
GAMCO describes itself as a privately owned investment manager, providing services to high net worth individuals as well as for pension and profit-sharing plans, banking or thrift institutions, investment companies, other pooled investment vehicles, foundations, charitable organizations, corporations and state or municipal government entities. Its one of several companies associated with noted investment adviser and stock market investor Mario Gabelli, who is listed as one of the company's principals.
In its filings with the Securities and Exchange Commission, GAMCO pointed out that Pep Boys' cumulative returns to shareholders has underperformed compared with Standard & Poor's SmallCap 600 Index, S&P 600 Automotive Retail Index and Pep Boys' own index of peer and comparable companies.
“We are pleased to have reached this understanding with GAMCO, as we believe it is in the best interests of all Pep Boys shareholders to avoid the significant cost and distraction of a proxy contest,” said Chairman Bob Hotz.
GAMCO's nominees are:
- Matthew Goldfarb, 43, chief restructuring officer and acting CEO of Cline Mining Corp., a Canadian mining company. GAMCO cites his “vast investing experience, experience with commercial and corporate law (and) his extensive record of service on the boards of several public companies” as reasons for nominating him.
- F. Jack Liebau Jr., 51, an investment management industry veteran who is on Myers Industries Inc.'s board. GAMCO cites his “vast financial, strategic, executive and investment experience working with companies in a wide range of industries” for his nomination.
- Bruce M. Lisman, 68, an investment industry veteran who is on the boards of directors of Myers Industries, National Life Group, PC Construction Co., and Merchants Bancshares Inc. GAMCO cites his “extensive board experience as a chair, vice chair, and committee chair/member in a broad range of businesses and civic organizations” for his nomination.
To make room on the board, current board members M. Shân Atkins and Nick White do not intend to stand for re-election, Pep Boys said.
Other incumbent directors standing for re-election are Robert H. Hotz, James A. Mitarotonda, Robert L. Nardelli, Robert Rosenblatt, Jane Scaccetti, John T. Sweetwood and Andrea M. Weiss.
Pep Boys Chairman Bob Hotz thanked Messrs. Atkins and White for their “tireless service” to the board and shareholders and said, “This is a time of significant opportunity at Pep Boys, and we are confident in our plans to grow the business and deliver a differentiated customer experience. We look forward to the insights and experience that the three new directors will bring to the Board as we work together to enhance long-term value for all Pep Boys shareholders.”
Pep Boys reported a near quadrupling of operating earnings in the quarter ended May 2 on marginally higher sales after posting a net loss of $27.3 million for the fiscal year ended Jan. 31 as the company took millions in goodwill and asset impairment charges in the fourth quarter.