Fermi rejects ex-CEO takeover bid, says solicitation 'not valid'
Fermi Inc on Wednesday responded to two SEC filings from its former chief executive Toby Neugebauer, noting the proposals represent an attempt to take control of the board and company.
Fermi is a real estate investment trust focused on data centres and a power grid development in Texas
On Friday, the company said it had terminated the contract of co-founder and former CEO Toby Neugebauer due to conduct which violated its terms.
Fermi noted two separate SEC filings made by Neugebauer, the first being to hold an ‘invalidly called’ special meeting of shareholders, and the second to solicit shareholder consents to a call a special meeting. The company described the latter as a ‘tacit admission of the ineffectiveness of his first request’.
The company stated that Neugebauer’s special meetings request is ‘not valid, has been rescinded by the officers who assumed the offices he once held, and at the time his request was made, by Mr Neugebauer’s own admission, when he knew he was going to be removed as CEO’.
Regarding the second proposal, Fermi said Neugebauer’s consent solicitation is not in the best interests of shareholders and recommended they do not tender their consent.
The company said it was ‘disappointed’ in the ex-CEO’s attempts to take control, stating that his actions reflect that of a ‘disgruntled former CEO who was terminated for cause’. Fermi urged shareholders not to take any action in support of his solicitations.
Fermi added that Neugebauer’s proposals aim to expand the size of the board, fill it with his own nominees, take control of the company and ‘pursue his stated goal of selling Fermi quickly’.
The company explained that an immediate sale would be premature and could result in a transaction ‘far below’ Fermi’s intrinsic value.
Shares in Fermi were down 0.7% at $5.00 around midday on Wednesday in London. They are down 83% over the past 12 months. In New York, shares were up 1.2% at $5.00 during pre-market dealings.
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