Attempts by Point Blank Solutions to further postpone their 2008 annual meeting of shareholders has been denied by the Delaware Court of Chancery. The meeting of shareholders is scheduled for August 19th.
Just last week we blogged on the battle between Steel Partners and Point Blank Solutions (PBSO.PK). Brief Background: Steel offered to purchase Point Blank for $5.50/share earlier this year . After being rebuffed by the board as too low an offer (BTW - PBSO is currently trading around $2.50/share), Steel announced their intentions to replace a majority of the board at the annual meeting. The Company hired Wachovia to review strategic alternatives, including a sale, and postponed the annual meeting until the process is complete. Steel sued, attempting to press the Company to hold the meeting sooner than later. The Delaware Court of Chancery allowed the postponement of the meeting - with one caveat -- the Company could not postpone the meeting again without the Court's approval. In an effort to press their luck once more, PBSO petitioned the Court to postpone the meeting again until November. This petition was denied yesterday.
Based on our understanding of the situation, we believe Steel Partners is positioned to win the proxy contest and replace 5 of 7 board members at the annual meeting. We believe this to be the case even though two prominent proxy advisory services (Glass Lewis and Risk Metrics - ISS) recommended shareholders vote for the incumbent directors.
Below is our completely unscientific shareholder vote projection:
Anticipated Votes for Steel Partners' Nominees
David Brooks (PBSO's former CEO) 16.1%
Steel Partners 9.6%
Other Activist Hedge Funds 16.7%
Retail Shareholders 10%
Estimated Total = 52.4%
Anticipated Votes for Point Blank's Current Board
Terry Brooks (ex-wife of PBSO's former CEO) 5.9%
Institutional Investors <2%
Retail Shareholders 30%
Estimated Total = 38%