MONTREAL: The investment firm aiming to take control of Miranda Technologies has put forth its nominees for the board of directors, including former Harris, Leitch and Grass Valley executive, Tim Thorsteinson. JEC capital Partners of Randolph, Mass., which holds 7 percent of Miranda’s shares, filed a requisition last month to remove of four of the company’s seven incumbent directors and replace them with JEC nominees. JEC was joined by JMB Capital Partners Fund, LP, which holds approximately 3.2 percent of Miranda’s shares.
“The proposed directors have a wide range of industry, merger and acquisition, and corporate finance experience,” JEC said in a statement. “Moreover, they will bring change and a shareholder-focused approach to an entrenched Miranda board that has been unchanged since 2006, and whose independent directors hold virtually no shares in the company--less than 0.3 percent. From Dec. 31, 2005 through Jan. 5, 2012, Miranda’s shareholders have experienced more than a 40 percent decline in Miranda’s market capitalization.”
The proposed nominees are Claude Fontaine, a retired attorney who specialized in corporate issues; Clifford Press, a partner with Oliver Press Partners, a New York investment firm; Thorsteinson; and K. Peter Heiland, a JEC managing director. JEC did not say which Miranda board members it wanted replaced.
JEC maintains the Miranda is undervalued. Shares (TSE: MT) have been trading most of this month between C$9 and C$10, a far cry from last January when they traded at less than C$5. Shares reached a peak of just over C$19 in 2006. JEC and JMB called for a special shareholder meeting to hold a vote, but they were rebuffed by the sitting Miranda board: Chairman W. Brian Edwards, an entrepreneur; Jean Bazin, an attorney; Thomas Cantwell, an investor; Isabelle Courville, president of Hydro-Quebec Distribution; Terry Nickerson, former chief financial officer with ATI Technologies; and Patrick Whittingham, a former Sony executive.
“The board and management of Miranda believe that there are already sufficient shareholders that are opposed to the requisition, holding a sufficient number of shares of the company, to cause the JEC/JMB proposal to fail,” they said in late December.
The incumbents went on to point out that Miranda was “well positioned financially, operationally and competitively,” and that it outperformed both the S&P/Toronto Exchange Composite and Information Technology Index. Revenues increased 33 percent in the third quarter of 2011 to $131.8 million versus the same period in 2010. Miranda posted record profit of $22.7 million on revenues of $130 million in 2008, when it closed its $40 million acquisition of Nvision. It took Omnibus in 2010 for $46.7 million.
JEC’s Heiland said the firm was “surprised and disappointed by the inaccurate and misleading characterization of our prior interaction with the board.” He said the board declined to communicate with JEC directly and resorted to third-party advisors. Miranda and the board are represented by BMO Capital Markets as financial advisors and Osler, Hoskin & Harcourt LLP as legal counsel.
“The board’s refusal to discuss these issues directly reinforces JEC’s belief that Miranda’s current board... will continue to ignore the genuine interests of the concerned shareholders of Miranda and their desire for meaningful change. The current board’s out-of-touch view that is has strong support among shareholders is shocking.”
JEC has retained Norton Rose Canada LLP as legal counsel and Kingsdale Shareholder Services to manage proxy issues. The firm will mail a proxy circular to shareholders prior to Miranda’s annual meeting, scheduled for April 17, 2012.
~Deborah D. McAdams
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