In an amended 13D filing on Nabi Biopharmaceuticals (NASDAQ:NABI), 9.5% holder Daniel Loeb's Third Point LLC said it intend to conduct shortly a consent solicitation in order to remove Chairman/CEO Mr. McLain and possibly one or more other directors from the Board of Directors. Loeb said the company refused to comment on whether it is moving toward a strategic alternatives process or whether some other decision was taken by the Board. The hedge fund has been encouraging the Company and its Board of Directors to explore strategic alternatives in order to maximize value for all shareholders.
From the 'Purpose of Transaction' section of the filing:
"Over a period of approximately seven months, the Reporting Persons have encouraged the Company and its Board of Directors to explore strategic alternatives in order to maximize value for all shareholders. The Reporting Persons have repeatedly expressed to the Company and the Board their belief and concern that the Company's "cash burn" rate is too high and its strategic plan is too risky for the Company to continue with "business as usual." Of particular concern to the Reporting Persons are that the Company does not appear to have been receptive to interest from prospective buyers of the Company or its component assets, and the possibilities that the Company may have to sell valuable assets at inadequate prices or enter into dilutive equity-linked financings in order to follow through on its business plan.
On September 14, 2006, in advance of a Board meeting scheduled for the following day, the Reporting Persons once again called upon the Board of Directors to expand its investment bankers' mandate to allow them to explore all ways to maximize the value of the Company's assets. Since that Board meeting, the Company has refused to comment on whether it is moving toward a strategic alternatives process or whether some other decision was taken by the Board.
As a result, the Reporting Persons intend to conduct shortly a consent solicitation in order to remove Mr. McLain and possibly one or more other directors from the Board of Directors. In conjunction with this solicitation, the Reporting Persons also intend to solicit consents in favor of a proposal requesting that one or more individuals named by the Reporting Persons be added to the Board to fill any vacancies created by the removal of directors.
Under the Delaware General Corporation Law (the "DGCL") and the Company's Certificate of Incorporation (the "Certificate"), the shareholders of the Company are entitled to act by written consent to remove directors of the Company. The written consent procedure to remove directors operates outside of annual or special meetings of shareholders and may be undertaken at any time. Although a provision of the Company's Bylaws (the "Bylaws") purports to limit the removal of Company directors to instances of "cause" and to require a 75% vote of the shareholders to effect such a removal, the Reporting Persons believe that this Bylaw provision is invalid and ineffective because it conflicts with the DGCL. Under the DGCL, except in cases not relevant to the Company and except where the right is limited in the Certificate (not the Bylaws), the Company's shareholders have a right to remove any or all Company directors, without cause, by the vote of the holders of a majority of the shares of Common Stock outstanding. The Certificate does not restrict this statutory right of the shareholders to remove directors of the Company by majority vote and without cause.
The Reporting Persons believe, however, that under the DGCL and the Bylaws, the remaining members of the Board of Directors, and not the shareholders, have the right to fill any vacancies created by the removal of directors. Accordingly, the Reporting Persons also intend to solicit consents, at the same time as consents are solicited for the removal of Mr. McLain and possibly one or more other directors, in favor of a resolution of the shareholders of the Company calling on the Board to fill the vacancies with individuals who will be named by the Reporting Persons at the time of the consent solicitation.
In connection with the consent solicitation, Third Point LLC and certain of its affiliates intend to file a consent statement with the Securities and Exchange Commission (the "SEC") to solicit stockholders of the Company with respect to the removal of Mr. McLain and possibly one or more other directors from the Board of Directors. THIRD POINT LLC STRONGLY ADVISES ALL STOCKHOLDERS OF THE COMPANY TO READ THE CONSENT STATEMENT WHEN IT BECOMES AVAILABLE BECAUSE IT WILL CONTAIN IMPORTANT INFORMATION, INCLUDING INFORMATION RELATING TO THE PARTICIPANTS IN ANY SUCH CONSENT SOLICITATION. SUCH CONSENT STATEMENT, WHEN FILED, AND ANY OTHER RELEVANT DOCUMENTS WILL BE AVAILABLE AT NOCHARGE ON THE SEC'S WEBSITE AT HTTP://WWW.SEC.GOV.