On September 21, I first learned about the Offer to Exchange that Navios Maritime Holdings (NYSE:NM) had presented to its preferred shareholders. I quickly realized that this travesty of an offer was little more than a thinly veiled extortion attempt designed to scare and intimidate us into accepting mere pennies on the dollar by threatening us with the loss of all key rights we held as preferred shareholders if we refuse to tender our shares.
Worse yet, the offer was worded in such a way that the majority of my followers, including me, had difficulty figuring out exactly what potential outcomes we faced based on who else might tender and how many shares were tendered. The part that really enraged me and induced me to act was the way the offer was carefully worded, as if the company was in no way recommending or advising how we should decide. The following paragraph was liberally sprinkled throughout the offer:
You must make your own decision whether to tender Series G ADSs or Series H ADSs in the Exchange Offer and, if so, how many of such Series G ADSs or Series H ADSs to tender and the form of consideration to be paid therefor. Neither we, our Board of Directors, the Information Agent, the Exchange Agent, the Depositary, nor any affiliate of any of the foregoing or any other person is making any recommendation as to whether or not you should tender your Series G ADSs and Series H ADSs in the Exchange Offer. We have not authorized any person to make such a recommendation. You are urged to discuss your decision with your own tax advisor, financial advisor and/or broker.
The following day I submitted a Seeking Alpha article, as the opening salvo in my battle to prevent Navios from succeeding in attaining the necessary 2/3rd of the preferred shares of each series to accept the low-priced tender offer, thereby forcing the remaining preferred shareholders to hold what would become virtually worthless shares. Within a very short time, many of my followers and others joined my battle against Navios. Of late, several have reported that they have been bombarded with requests to accept the offer.
Because I fear Navios will persist in its efforts to rid itself of the preferred shareholders, the accumulating missed dividend payments (soon to be three), and the restrictions and penalties it will be forced to bear, I have retained counsel to aid me in this fight and have filed a lawsuit in the United States District Court for the Southern District of New York on behalf of all preferred stockholders.
The best way to stop Navios from taking advantage of its preferred stockholders is for us to refuse to tender our shares into the offer. However, to the extent that Navios succeeds in stripping us of our valuable preferred shares and our rights through its coercive offer, I am taking decisive action to hold the Company and its directors personally liable to us for the harm they have caused, including seeking to restore our rights and an award of significant monetary damages.
The copy of the Complaint is attached
Disclosure: I am/we are long NM-G, NM-H.
I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.