Greenlight or Red Light – GM Proxy Fight Coming?

AutoInformed.com on Greenlight v GM Proxy fight

It’s all about money. What a surprise coming from a Wall Street firm.

Greenlight Capital, Inc. yesterday announced that it has filed a preliminary proxy with the Securities and Exchange Commission to nominate three” highly-qualified,” independent candidates for election to the Board of Directors of General Motors Company’s (NYSE: GM) at the 2017 Annual Meeting of Shareholders, and to let shareholders vote on its Plan to split GM’s common stock into two classes.

In the filing, Greenlight – a $10 billion investment firm – said in essence that GM lied when it asserted that a credit downgrade was possible if the stock were split into two classes. Greenlight also said it repeats its request that GM has denied on numerous occasions to consent for Greenlight to speak directly to the rating agencies about the Plan so that it can be accurately evaluated by a formal rating committee.

“Greenlight believes that GM has embarked on a campaign specifically designed to mis-characterize the Plan and mislead investors and credit rating agencies about its merits, said the quintessential Wall Street venture capital firm. “As part of its effort, GM has claimed that Greenlight’s Plan would lead to a credit rating downgrade. Greenlight believes that the rating agencies relied on faulty information to provide GM feedback. After Greenlight sent GM a term sheet detailing the Plan, GM made numerous detrimental changes to the term sheet, which it then misrepresented as being the Greenlight Plan in its discussions with the rating agencies,” according to the SEC filing.

Not surprisingly, GM demurred.

In a carefully crafted rancorous statement it said: “General Motors presented Greenlight’s Dividend Share idea to the rating agencies fully and fairly. The rating agencies’ public statements issued regarding the Greenlight proposal clearly indicate that they understood the idea in all its facets, and would represent a credit negative if implemented. Any suggestion to the contrary is baseless and irresponsible.”

Greenlight GM Director Nominees

David Einhorn, President of Greenlight, said, “To ensure the GM Board objectively considers our Plan and to look after the best interests of shareholders, we are nominating a slate of experienced candidates. Our nominees are proven business leaders who are committed to working with the incumbent Directors and exploring all avenues to address GM’s persistent valuation gap and create value for all shareholders.”

Nominees

  • Leo Hindery, Jr.: Managing Partner of InterMedia Partners, and former Chief Executive Officer of Tele-Communications, Inc. (TCI), Liberty Media and AT&T Broadband.
  • Vinit Sethi: Partner and Director of Research at Greenlight.
  • William N. Thorndike, Jr.: Founder and Managing Director of Housatonic Partners, a private equity investment firm; Chairman of CONSOL Energy; author of The Outsiders: Eight Unconventional CEOs and Their Radically Rational Blueprint for Success.

About Ken Zino

Ken Zino is an auto industry veteran with global experience in print and electronic media. He has auto testing, marketing, public relations and communications expertise garnered while working in Asia, Europe and the U.S.

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