Orange Capital, LLC issued a statement regarding Strategic Hotels & Resorts Inc.'s (BEE) February 19, 2013 public response to Orange Capital's letter urging an immediate sale of the Company.
Orange Capital said that it is disappointed by Strategic's response to its February 1st letter urging an immediate sale of the Company, and its continued refusal to address the issues it raised as evident in yesterday's financial reports.
On Wednesday, Strategic Hotels & Resorts reported a wider fourth-quarter net loss attributable to shareholders of $36.4 million or $0.18 per share, compared to $15.9 million or $0.09 per share in the same quarter last year, echoing higher expenses, particularly food, beverage and other departmental expenses and also an impairment charge totaling $18.8 million. Comparable funds from operations, or FFO, for the quarter was $12.2 million or $0.06 per share, down from $20.1 million or $0.11 per share a year ago.
Orange Capital demanded Strategic immediately form a Special Committee of Independent Directors and retain a financial advisor. The objectives of the Special Committee would be to overhaul existing governance to conform with industry "best practices" and explore all strategic alternatives, including a sale, which it maintains is the best alternative for shareholders. Should the independent directors fail to do so, they should be replaced, Orange Capital said.
Orange Capital noted that its Letter clearly outlined why a sale, with estimated proceeds of $11 - $14 per share, is the best path to maximize shareholder value. However, the company failed to communicate which of our "assumptions and conclusions" it disagrees with, and why a sale is not in the best interests of shareholders.
Orange Capital stated that it has increased its holdings to 6.63 million shares since it published its Letter.
Orange Capital said that Institutional Shareholder Services ("ISS"), a leading independent proxy voting and corporate governance advisory firm, recommended that shareholders withhold votes for four of the Company's 10 directors at Strategic's 2012 annual meeting, including the Company's CEO Raymond Guellein.
For comments and feedback: editorial@rttnews.com