Elliott Files Preliminary Proxy Materials Urging Salomon Brothers Fund Stockholders to Vote 'Against' New Management Agreement
September 01 2005 - 3:56PM
PR Newswire (US)
Largest Stockholder Says SBF Has Failed to Address Substantial
Discount to Net Asset Value Which Represents Approximately $200
Million in Aggregate 'Trapped Value' Since 2002 NEW YORK, Sept. 1
/PRNewswire/ -- Elliott Associates, L.P. and Elliott International,
L.P. (collectively "Elliott"), who together are reportedly the
largest stockholder of The Salomon Brothers Fund Inc. (NYSE:SBF),
today filed preliminary proxy materials with the Securities and
Exchange Commission in opposition to proxy materials filed by SBF.
Elliott is urging SBF stockholders to vote AGAINST a proposed New
Management Agreement, scheduled for a vote at a Special
Stockholders' Meeting on October 21, 2005. The requested vote is a
step in the pending transaction between Citigroup, Inc. (NYSE:C)
and Legg Mason, Inc. (NYSE:LM), which contemplates a transfer of
the SBF management agreement from Citigroup to Legg Mason. Elliott
is the beneficial owner of 5.88 million shares of SBF, representing
in the aggregate approximately 6% of the Fund's total shares
outstanding, and has owned SBF shares since 2002. In its
preliminary proxy materials, Elliott said, "We are deeply concerned
by the Fund's low share price; and we are deeply concerned about
the Fund's meaningful discount to NAV (Net Asset Value). The
historical average 14% discount to NAV measured from the beginning
of 2002 and ending August 31, 2005 implies approximately $200
million in aggregate value trapped in the Fund, which is roughly
$2.00 per share." Elliott, in its proxy materials, said, "...the
narrowing of the discount to NAV since the announcement of the
Transaction is not a sign of confidence in the Board's plan for
SBF. Rather, we believe it is driven by anticipation of stockholder
activism and by a recognition that it will be very difficult for
the Fund to obtain stockholder approval for the New Management
Agreement, thus giving stockholders rare leverage to force the
Board to take concrete steps to eliminate the discount to NAV. In
short, we believe that the narrowing of the discount is a sign that
stockholders have a glimmer of hope that the Fund's trapped value
may finally be returned to them. We fear that this temporary
narrowing will disappear and double-digit discounts to NAV will
return if the Board obtains approval of the New Management
Agreement before eliminating the discount." "These are unique
circumstances," Elliott said in its proxy materials. "...Because
management needs the votes to obtain the Required Consent to
approve the New Management Agreement, this Special Meeting may be
an unusual opportunity to deny the Board the results it wants until
it takes action to enhance the value of your investment by
eliminating or nearly eliminating the discount to NAV. Rejecting
the New Management Agreement would also tell the investment
community that SBF's stockholders are demanding its management be
serious about eliminating or nearly eliminating the discount to NAV
and increasing stockholder value -- your value." "We, the Concerned
Stockholders, are not advocating any particular course of action to
eliminate or nearly eliminate the Fund's discount to NAV. But we
believe that your Board and management should act, and we do
recognize that other closed-end funds have successfully pursued a
variety of strategies to address their discounts," according to the
Elliott funds. On August 26, 2005, in a letter to the SBF Board of
Directors, Mark Levine, a portfolio manager at Elliott who manages
the SBF position, said his firm would oppose approval of the New
Management Agreement and "actively consider all of our options,
including among other things, soliciting proxies from other
stockholders." Elliott has retained Innisfree M&A Incorporated
to assist it in connection with the solicitation of proxies in
opposition to SBF's Board of Directors and "Against" the New
Management Agreement at the October stockholders' meeting. The
preliminary proxy materials and other relevant documents are
available free at http://www.sec.gov/, and copies also are
available by contacting Innisfree M&A Incorporated at (888)
750-5834 (toll free). About Elliott Associates, L.P. Elliott
Associates, L.P. and its sister fund, Elliott International, L.P.
have more than $5.2 billion of capital under management as of July
2005. Founded in 1977, Elliott Associates is one of the oldest
funds of its kind under continuous management. PLEASE READ THE
PROXY STATEMENT OF ELLIOTT ASSOCIATES, L.P. AND ELLIOTT
INTERNATIONAL, L.P. WHEN IT BECOMES AVAILABLE, BECAUSE IT CONTAINS
IMPORTANT INFORMATION INCLUDING INFORMATION ABOUT INDIVIDUALS
DEEMED TO BE PARTICIPANTS IN THE SOLICITATION OF PROXIES OF THE
SALOMON BROTHERS FUND INC. STOCKHOLDERS. YOU MAY OBTAIN THIS PROXY
STATEMENT, OR ANY OTHER RELEVANT DOCUMENTS, FOR FREE AT
WWW.SEC.GOV. YOU MAY ALSO OBTAIN THIS PROXY STATEMENT, OR ANY OTHER
INFORMATION RELEVANT TO THE SOLICITATION OF PROXIES BY ELLIOTT
ASSOCIATES AND ELLIOTT INTERNATIONAL, BY CONTACTING INNISFREE
M&A INCORPORATED, 501 MADISON AVENUE, NEW YORK, NEW YORK 10022
TOLL FREE AT (888) 750-5834. PRESENTLY, A PRELIMINARY FORM OF THIS
PROXY STATEMENT IS PUBLICLY AVAILABLE. DATASOURCE: Elliott
Associates, L.P. CONTACT: Scott Tagliarino, +1-212-506-2999 or
+1-917-922-2364 (cell)
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