Shareholders Demand Change at Telephone and Data Systems, Inc. Southeastern-led "One Share, One Vote" proposal receives support from holders of more than 80% of the independent shares voted, serves as referendum for more democratic voting structure and management accountability
MEMPHIS, Tenn., Aug. 11 /PRNewswire/ -- Southeastern Asset Management, Inc. ("Southeastern"), investment advisor to Longleaf Partners Fund ("Longleaf"), announced today that the shareholder proposal it introduced at the annual meeting of Telephone and Data Systems, Inc. ("TDS" or the "Company") (NYSE: TDS) was successful, receiving support from holders of more than 80% of the non-aligned, independent shares voted on the proposal. "Independent shares" excludes the 6,359,982 Series A Common Shares owned by members of the Carlson family and other Company insiders per the Company's proxy statement, and 3,001,748 Common Shares beneficially owned by Southeastern as of the record date for the annual meeting. We assume that all Series A Common Shares were voted against the proposal.
"We are encouraged that independent shareholders have strongly supported our proposal to recapitalize the common equity structure of TDS, expressing their desire for a democratic corporate governance structure," said O. Mason Hawkins, chairman and chief executive officer, Southeastern. "This is an important step in holding TDS' management and the Board accountable to all shareholders so that management might finally begin to address TDS' strategic problems. While we recognize that the proposal was defeated by a straight vote, due to the disproportionate weight of the votes cast by the TDS Voting Trust relative to its much smaller economic stake in the Company, we firmly believe independent shareholders have sent the management and the Board a clear signal of dissatisfaction."
Southeastern made its proposal in light of management's demonstrated poor capital allocation, refusal to follow value-enhancing recommendations and its failure to disclose or pursue the premium bid for TDS from a well-resourced strategic acquirer offered in 2007. To date, management has refused to answer the questions Southeastern presented at the 2009 annual meeting regarding a long-term business plan that would be superior to the sale of the Company.
In its proposal Southeastern requested that TDS recapitalize the Company's common equity structure into one class of common stock to result in one vote per share for all outstanding common stock. The disparity inherent in the multi-class voting structure that favors the Carlson family has permitted the Company and its management to ignore the opinions of its public shareholders.
Public shareholders, including Southeastern, have repeatedly expressed their views with regard to the stewardship and strategic direction of TDS, including at Gary Lutin's Shareholder Forum, and through Glass Lewis' "Proxy Talk" conference call. Proxy advisory firm Glass Lewis subsequently recommended that shareholders vote for the proposal. And Lutin recently called the expression of shareholder support that Southeastern's proposal received, "extraordinary, and an exceptionally clear expression of investor interests."
More information about the issues can be found at The Shareholder Forum for Telephone and Data Systems, Inc.: www.shareholderforum.com/tds/.
ABOUT SOUTHEASTERN ASSET MANAGEMENT
Southeastern Asset Management, Inc., headquartered in Memphis, Tenn., is an investment management firm acting as investment advisor to institutional investors and the three Longleaf Partners Funds: Longleaf Partners Fund, Longleaf Partners Small-Cap Fund, and Longleaf Partners International Fund. Southeastern was established in 1975, and the first of the Longleaf Partners Funds was launched in 1987.
Press Contact: Christina Stenson Brunswick Group 212-333-3810
SOURCE Southeastern Asset Management, Inc.