Hedge fund Harbinger Capital Partners appears to have won its proxy fight with Richmond-based Media General Inc., landing three directors on the company’s nine-member board of directors.
At Media General’s annual meeting on Thursday, Chairman J. Stewart Bryan III said that, based on a preliminary tabulation of proxy votes, Harbinger nominees Eugene I. Davis, F. Jack Liebau Jr. and J. Daniel Sullivan have been elected to the board, replacing three directors backed by the company. (Media General is the parent company of Virginia Business magazine.)
The new directors were elected by holders of the company’s Class A shares, which are publicly traded. The remaining six directors were re-elected by Class B shares, which are largely controlled by the Bryan family.
Harbinger’s bid garnered the support of Mario Gabelli, Media General’s largest shareholder. Because results were preliminary, no figures on the proxy votes were available.
“We’ll certainly survive this and continue on what we think is the best course for the company,” Bryan said after the meeting.
Harbinger, which owns 18 percent of Class A shares, has criticized Media General’s direction and suggested that it pull out of Florida, where the company owns newspapers, television stations and Web sites. Media General has countered that Harbinger’s view of the company is short-sighted.
“It’s true that, absent Florida, our performance would be much better right now,” Marshall N. Morton, Media General’s president and CEO, said during an address at the meeting. “Does that mean we should sell our Florida properties? It does not. Ours is a market approach. We can’t be a leading provider without a longer-term view.”
Morton said the company is cutting costs and will be well positioned when the Florida market rebounds. He added that effects of the slowing economy have overshadowed the company’s progress in becoming a new media company through extensive use of online services and new print and broadcast products.
Now that the proxy fight is over, “we ready to move on to rebuilding shareholder value,” Harbinger representative Joseph Cleverdon said at the meeting.
Media General’s Class A stock closed Wednesday at $13.40 a share, down from $37.45 on the same date last year.
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