Fermi claims confidence in future, tells investors to rebuff ex-CEO
Fermi Inc on Monday urged its shareholders to stand by its board as it works to regain commercial momentum and customer engagement, in response to former Chief Executive Officer Toby Neugebauer’s attempt to take control.
The real estate investment trust, which is focused on data centres and a power grid development in Texas, told shareholders to sign and return its (white) consent revocation card, in response to Neugebauer’s consent solicitation for a special meeting of shareholders, and to discard his (green) consent card.
It noted that no meeting has yet been called, as Neugebauer does not currently have enough support.
However it added that Neugebauer, who it said ‘should not be trusted to oversee your investment,’ controls approximately 40% of Fermi’s shares along with his affiliates, with only 50.1% of shareholders needed to support his solicitation.
Fermi had announced in May the termination of Neugebauer’s contract, citing ‘conduct in violation of the terms of such agreement and of company policies’.
In its letter to shareholders on Monday, Fermi elaborated, saying that alongside misrepresentations to the board, he displayed a ‘pattern of conduct in violation of company policies,’ and that his behaviour ‘disrupted operations and threatened critical relationships with key stakeholders at a pivotal time’.
It said Neugebauer is trying to regain control in order to ‘force a sale at a price that is far below Fermi’s intrinsic value,’ which would ‘[lock] in substantial losses for Fermi’s public shareholders’, adding that its stock declined more than 80% from its initial public offering during the former CEO’s tenor.
Fermi shares were up 4.0% at $7.43 on Monday afternoon in London.
The company told shareholders that its commercial momentum has strengthened and engagement with prospective tenants and strategic partners has reaccelerated since Neugebauer’s termination. Additionally, it is ‘increasingly confident it will announce one or more transactions with a tenant and/or joint venture partner.’
‘The company urges shareholders not to support Mr Neugebauer’s actions when it is at a critical inflection point for delivering significant long-term value-enhancing benefits to its shareholders,’ it reiterated.
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