NEW YORK, July 15, 2014 /PRNewswire/ -- Leading independent proxy voting advisory firm Glass Lewis & Co., LLC ("Glass Lewis") has recommended that shareholders of Antares Energy Ltd (ASX: AZZ) (AZZEF) vote FOR the election of four Lone Star Value independent director candidates at the 22 July General Meeting and to remove two employee directors from the Board. Glass Lewis' strong endorsement of Lone Star Value's campaign to revitalise the Antares Board follows a favorable recommendation by the other leading proxy advisory firm, Institutional Shareholders Services ("ISS"), last week, which also expressed strong support of Lone Star Value's slate.
Glass Lewis' recommendation comes on the heels of recent comments by CEO James Cruickshank claiming shareholder value creation at Antares. These claims are not only misleading in Lone Star Value's view, but also were clearly found unsubstantiated or unpersuasive by both Glass Lewis and ISS. When James Cruickshank was appointed director on 8 October 2004, Antares was trading at $0.61. On 5 May 2014, the date on which Lone Star Value announced its intention to requisition a General Meeting, Antares' share price had fallen to $0.435 – a 28.7% loss for investors during his directorship. In addition, contrary to Cruickshank's claims, Antares failed to meet its own openly publicised targets, "of realising a share price of $1.00 by 31st December 2011, $1.50 by 31st December 2012 and $2.00 by 31st December 2013." (See Antares Energy Limited, 31 Oct. 2011 ASX/News Release).
In making its recommendation for change at Antares, Glass Lewis criticised Antares' "mediocre disclosure around the Company's prospects and plans and increasingly regressive and conflicted board policies and structures." Glass Lewis concluded Lone Star Value's proposals offer a "compelling opportunity for shareholders to reconstitute the board with independent, experienced individuals poised to address the specific concerns raised." Glass Lewis further affirmed that "an injection of independent perspectives -- five independent members on a board of six -- is particularly crucial now."
Jeff Eberwein of Lone Star Value commented, "We are deeply gratified by the overwhelming support we have received from both leading proxy advisory firms and our fellow shareholders. We believe recent revelations of apparent trading violations by two incumbent directors of Antares, serious questions over the motivation behind a seemingly strategically incoherent convertible note issuance, and the 'on-off-on' sale of all the Company's Permian Basin assets have left shareholders and proxy advisors convinced of the need for a stronger and independent Board to lead Antares. We are looking forward to an opportunity to enhance shareholder rights and maximize value at Antares for the benefit of all shareholders."
Mr. Eberwein urged shareholders to vote in favour of all five of its independent, highly-qualified director candidates, Jeffrey Eberwein, Aaron Kennon, Eric Hyman, William Fairhurst and Michael Sharwood, as well as removing Antares' two employees, Mr. Shoemaker and Ms. McAppion, from the Board.
Excerpts from Glass Lewis' Analysis & Recommendation
In Support of the Election of Lone Star Value's Director Candidates:
"We are inclined to suggest Lone Star presents reasonable cause -- both in terms of a flatly confounding strategic procession and objectively mediocre corporate governance -- to suggest investors would benefit from a fresh, informed and, perhaps most importantly, independent perspective on those alternatives available to the Company. This view takes into account arguments submitted by Antares management, which, while sound in fits and spurts, ultimately fail, in our view, to deflect weightier concerns surrounding what appears to be an insular board room promulgating a regressively terse disclosure regime and a functionally opaque growth strategy."
On the Strong Qualifications of Lone Star Value's Director Candidates:
"In particular, we note each of Messrs. Fairhurst, Hyman and Sharwood have backgrounds in geology or petroleum engineering, with each of Messrs. Fairhurst and Hyman posting current or prior executive service at oil and gas exploration and production firms. Moreover, each of these individuals appears to be independent from Antares. . . .Given a lengthy list of outstanding governance concerns and a less than transparent pattern of disclosure, we are similarly inclined to suggest all investors would benefit from an unaffiliated shareholder advocate going forward. In consideration of the nominees that might prospectively fill that role, we believe shareholders should support the election of Mr. Kennon."
On Antares' Relative Share Price Performance:
"In particular, though we acknowledge Antares has modestly trailed a broad small-cap industry index, we consider it more noteworthy that: (i) the Company has heavily trailed the equal-weight peer composite over each of the selected review periods; and (ii) the total three-year return to Antares investors since the Company's stated involvement in the Permian Basin region is just 6.7%. We consider this offers very little support for the board's assertions that Antares management is successfully generating compelling value for investors since effectively becoming a Permian Basin pure-play. In addition, while the board laments Lone Star's settlement arrangement with regional peer Callon Petroleum Company as something of an undesired compromise by that firm, it is worth considering Callon's shares were up 65.6% between October 16, 2013 -- the last date before Callon was approached by Lone Star -- and May 22, 2014. In contrast, Antares' shares were down 5.0% over the same period (Source: Capital IQ)."
On Antares' Corporate Governance Failures:
"We note three out of the four sitting directors are insiders. In this respect, we believe that the composition of the board raises very significant concerns about its objectivity and ability to perform its proper oversight role, in addition to material succession planning, renewal and other composition deficiencies over a period of time. . . . In addition, without an independent chairman -- indeed, with a sole executive holding several key managerial roles in addition to the chairmanship -- the current board structure fails to meet fundamental components of the ACSI and FSC guidelines."
Lone Star Value urges all Antares shareholders to read carefully the materials that Lone Star Value has mailed and may continue to mail to them as those materials contain important information. Lone Star Value called on all Antares shareholders to vote on its blue and white proxy card to improve the Board of Antares.
For further information please visit our website, www.antaresvalue.com.au, or call our shareholder information line, 1300 889 468 (from within Australia) or +61 2 8022 7902 (from outside Australia).
Proxy voting enquiries please contact:
+61 2 8022 7911
Media enquiries please contact:
Cannings Corporate Communications
+61 418 708 663
SOURCE Lone Star Value Investors, LP