Sunday, August 14, 2022

Saddle Point launches proxy contest at defense company Curtiss-Wright By Reuters

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© Reuters.

By Svea Herbst-Bayliss

BOSTON (Reuters) – Investment firm Saddle Point privately nominated four directors to the board of Curtiss-Wright (NYSE:) Corp, arguing the company’s stock is undervalued because it lacks a strategic focus and its earnings power is obscured by its noncore industrials business, some of which ought to be divested.

The company disclosed the nominations in a regulatory filing on Wednesday.

The New York-based firm, which owns approximately 0.3% of the Davidson, North Carolina-headquartered maker of defense and intelligence programs, has been engaged with the company since 2020 and in discussions with the board for months. It signaled to the company, valued at $5.8 billion, it was not seeking to replace the 10 incumbent directors but has experts on hand who could help guide the company better, people familiar with the discussions said.

A representative for Saddle Point, run by former Pershing Square Capital Management partner Roy Katzovicz, declined to comment.

Saddle Point’s slate includes national defense industry and financial industry experts.

Ellen Lord, who had been CEO at Textron Inc (NYSE:) subsidiary Textron Systems, also served as the first U.S. undersecretary of defense for acquisition and sustainment.

Christine Fox was acting deputy secretary of defense and the department’s director, cost assessment and program evaluation, from 2009 to 2013, after decades at the Center for Naval Analyses where she rose to president.

Rajender Kumar Chandhok was chief investment officer of Northrop Grumman Corp (NYSE:)’s pension system while Peter Carlin worked at investment firm Blue Harbor Group, LP, which helped catalyze the separation of BWXT Technologies from Babcock & Wilcox in 2015.

Curtiss-Wright said neither Fox nor Lord would “bring strengths to the Board that would enhance the expertise and qualifications already represented.” But it also urged Saddle Point to “withdraw its nominees and return to a constructive dialogue.”

Saddle Point’s nominations come as other activists are also engaged in the defense sector, including Starboard Value and Jana Partners at defense technology firm Mercury Systems (NASDAQ:). Defense industry stocks gained ground recently as investors rotated out of fast-growing tech names and as war in Ukraine added to demand.

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