Proxy Advisory Firm Backs Concerned Pantry Shareholders
HOUSTON & CARY, N.C. -- The battle between Concerned Pantry Shareholders (CPS) and The Pantry Inc. wages on.
Today, CPS, a group led by JCP Investment Management LLC and Lone Star Value Management LLC, announced that proxy advisory firm Glass Lewis & Co. recommended that Pantry shareholders vote for its board of director nominees: Todd E. Diener, former executive officer of Brinker International Inc.; James C. Papas, managing member of JCP Investment Management; and Joshua A. Schechter, director of Adrenas Co. Ltd.; at The Pantry's annual meeting on March 13.
"A leading independent proxy voting advisory firm has recognized the sustained underperformance of [The] Pantry and [believes in the nominees'] compelling case for a better plan to build The Pantry into a stronger, more profitable and ultimately more valuable company," Houston-based CPS stated.
In determining whether or not Pantry shareholders should vote for CPS' board of director nominees, Glass Lewis looked at the company's shareholder return, operating performance, responsiveness to governance concerns, as well as the experience and qualifications of CPS' nominees.
"Indeed, with limited space for rebuke, we believe JCP and Lone Star fairly highlight the fact that [The] Pantry lagged its peers by nearly any reasonable standard of value or performance," Glass Lewis wrote in its assessment.
CPS owns an aggregate of 1.9 percent of The Pantry's stock. Since expressing its concerns about the convenience store retailer, The Pantry's stock has risen significantly from about $13 to more than $15 per share in today's trade. However, the stock has still considerably underperformed against other retailers, including Susser Holdings Corp., Alimentation Couche-Tard Inc. and Casey's General Stores Inc., when comparing recent one-, three- and five-year periods.
Cary, N.C.-based The Pantry has repeatedly responded that CPS' board of director nominees are not qualified due to their lack of desired experience. Conversely, the parent of 1,538 Kangaroo Express stores in 13 states nominated Thomas W. "Tad" Dickson, former CEO of Harris Teeter Supermarkets Inc., to its board of directors.
"Tad has significant retail experience in the Southeastern U.S.," Pantry CEO Dennis Hatchell said on Jan. 29. "We look forward to the guidance he can provide."
When interviewed by CSNews Online earlier this month, Terry Monroe, a convenience store mergers and acquisitions specialist who himself took a retail chain public, and Karen Short, director at Deutsche Bank AG, both touted Dickson's experience and leadership skills.
This afternoon, The Pantry responded to Glass Lewis' comments by stating: "We are disappointed with the report issued by Glass Lewis, which contains numerous inaccuracies that illustrate Glass Lewis' fundamental lack of understanding of our business. Glass Lewis made several incorrect observations about The Pantry and its board of directors."
According to The Pantry, these incorrect observations include "repeatedly misidentifying Tad Dickson, the director candidate whom the company nominated in January 2014 to stand for election to the board, as Terry McElroy, who has been a board member since 2006 and is one of our longest-serving directors; and wrongly asserting that Dickson's extensive experience in the supermarket industry — including serving most recently as chairman and CEO of Harris Teeter Supermarkets, a leading food retailer in the southeastern U.S. with 216 stores and $4.1 billion of revenue — does not constitute valid retail experience."
The Pantry added that it believes Glass Lewis "did not give careful consideration to our business, strategy and board constitution. Accordingly, we strongly urge stockholders to disregard the information contained in Glass Lewis' unreliable report."