BOSTON, Feb 6 (Reuters) - Hedge fund Barington Capital said on Friday that it would nominate two independent candidates to Eastern Co’s board to push the industrial hardware maker to improve its financial performance and boost its share price.
Barington, which with a 5.2 percent stake is the company’s sixth-largest shareholder, told Eastern Chief Executive Officer Leonard Leganza that it was tired of waiting for change and would tell him how to fix things soon.
“After years of seeing no significant new initiatives being introduced by management that we believe are likely to meaningfully improve long-term shareholder value, we can wait no longer - it is time for decisive action and change at Eastern,” Barington CEO James Mitarotonda wrote to Leganza.
Barington and other hedge funds, including Nelson Peltz’s Trian Fund Management, Daniel Loeb’s Third Point and William Ackman’s Pershing Square Capital Management, have pressed companies to improve their financial health and asked for board seats.
Barington said it was time for new blood at Naugatuck, Connecticut-based Eastern, which has not named a new board member since President Bill Clinton moved into the White House in 1993. The average tenure for an Eastern director is 27 years.
“We will be nominating two ... candidates shortly,” Mitarotonda said without identifying them.
Barington included the letter as an exhibit in a regulatory filing with the U.S. Securities and Exchange Commission on Friday.
Mitarotonda also said the 157-year old company was too set in old-fashioned ways. He said he was dismayed that “you regularly field offers from corporations interested in merging with or acquiring Eastern and that you do not like to respond to those that are sent by email instead of by letter.”
Barington, which earned an 11 percent return in 2014, is also moving ahead with a proxy contest at Omnova Solutions Inc . (Reporting by Svea Herbst-Bayliss; Editing by Lisa Von Ahn)