Elliott Begins Proxy Fight Urging Salomon Brothers Fund Stockholders To Vote Against New Management Agreement
September 20 2005 - 1:37PM
PR Newswire (US)
Long-Term Stockholder Demands SBF Eliminate Substantial Discount to
Net Asset Value NEW YORK, Sept. 20 /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 began sending out
proxy materials to fellow stockholders urging them to vote AGAINST
a proposed new management agreement, scheduled for a vote at a
Special Stockholders' Meeting at 4:00 p.m. on October 21, 2005, at
the American Conference Centers, 780 Third Avenue, in New York. 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, a stockholder since 2002 and the
beneficial owner of 5.88 million shares, or approximately 6%, of
SBF, urged stockholders to do the following: * ACT NOW TO RELEASE
YOUR SHARE OF $200 MILLION IN "TRAPPED VALUE" AT THE SALOMON
BROTHERS FUND! * MAKE SBF ELIMINATE OR NEARLY ELIMINATE OUR FUND'S
DISCOUNT TO NET ASSET VALUE -- AND RETURN YOUR SHARE OF THAT VALUE
TO YOU! * HELP US DELIVER MORE VALUE TO ALL STOCKHOLDERS BY VOTING
AGAINST THE NEW MANAGEMENT AGREEMENT. * SIGN, DATE AND MAIL THE
BLUE PROXYCARD TODAY! In a letter to stockholders that was sent
with the final proxy materials, Elliott said: "We have long been
deeply concerned by the Fund's low share price, and its
longstanding, meaningful discount to NAV. As the enclosed proxy
materials show, the historical average 14% discount to NAV measured
from the beginning of 2002 and ending August 31, 2005 implies that
on average there was approximately $200 million in aggregate value
trapped in the Fund during that period. That's roughly $2.00 per
share! THE DISCOUNT REPRESENTS VALUE THAT BELONGS TO THE
STOCKHOLDERS. ACT NOW TO HELP PUT THAT VALUE IN YOUR POCKET, WHERE
IT BELONGS! Despite the fact that the Fund's shares have traded at
a significant discount to NAV for years, the Fund's Board and
management have taken no effective steps to eliminate or nearly
eliminate the discount and deliver that value to the stockholders.
The only recent actions taken to date have been, in our opinion,
inadequate buyback programs that have failed to enhance stockholder
value in any meaningful way. Consider the following: -- On July 17,
2002 your Board approved a share buyback plan for 1 million shares,
or less than 1% of the total shares outstanding and just 10 days of
average trading volume. This buyback was not completed until April
7, 2004. During that almost two-year time period the Fund's
discount to NAV actually widened -- from 14.1% to 14.7%. -- In
April 2004, in yet another attempt to address the discount, the
Board approved a buyback of 1 million additional shares. As of the
end of 2004, more than 300,000 of those shares had still not been
bought back. The discount failed to respond, ending 2004 where it
had been at the start of the new program -- 14.7%! -- As of June
30, 2005, more than 250,000 of those shares had still not been
bought back and the discount was then at 12.7%. WOULD YOU CALL THAT
AN EFFECTIVE BOARD PLAN TO ELIMINATE OR NEARLY ELIMINATE THE
DISCOUNT TO NAV? Remember, the SBF Board works for you -- the true
owners of the Fund -- and you have a say in your Fund's future. The
stockholders need to act now. We urge our fellow stockholders to
vote AGAINST the new management agreement unless and until the SBF
Board and management agree to eliminate or nearly eliminate the
discount to NAV. The time for half-measures is over; the time for
action is now! If the Board and management fail to act now, we
believe the discount will continue to persist indefinitely. Others
have publicly expressed the same concern. The upcoming vote on the
new management agreement provides stockholders of the Fund with a
unique opportunity to send a strong message to the Board and
management that they must take immediate steps to eliminate or
nearly eliminate the discount to NAV." A copy of Elliott's final
proxy statement is available at http://www.sec.gov/. If SBF
stockholders have any questions, or need further information,
please contact Elliott's proxy solicitor, Innisfree M&A
Incorporated, toll-free, at 1-888-750-5834. 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. DATASOURCE: Elliott Associates, L.P. CONTACT: Scott
Tagliarino, +1-212-506-2999, or cell, +1-917-922-2364
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