Manitowoc has reached an agreement with legendary investor Carl Icahn that will give him representation on the company board and the option of another board seat within its foodservice division once it has been spun off.
The manufacturer recently announced plans to separate its Cranes and Foodservice into two independent companies in 2016, with Icahn one of the main advocates for such a split.
Manitowoc’s CEO Glen Tellock confirmed that a settlement agreement had been reached with Icahn that includes customary standstill terms and certain governance provisions for the foodservice unit once the break-up is complete.
He said the governance details were in the best interests of shareholders and future investors in the standalone foodservice entity.
“We also welcome the perspective of Mr. Icahn’s representatives to the board of directors and believe they will add value. We look forward to working with them constructively,” said Tellock.
Icahn said he “applauded” the ability of Manitowoc’s board to recognise the importance of separating the companies as well as the importance of good corporate governance.
“We strongly believe that the separation of Manitowoc’s core businesses will create two stronger companies and that, in combination with improved corporate governance, shareholder value will be greatly enhanced by this agreement,” he said.
The corporate governance commitments for the anticipated standalone foodservice entity include incorporation in Delaware and annual elections for the board.
Additionally , any stockholder rights plan adopted by the foodservice entity will not have a trigger below 20% and, if not ratified by stockholders within 135 days of adoption, will automatically expire, while holders of 10% of the outstanding shares will be permitted to call a special meeting of stockholders.
The agreement with Carl Icahn also provides for, among other things, certain customary “standstill” restrictions, and Manitowoc has committed not to reduce its shareholder rights plan’s trigger below 20% for the duration of the standstill agreement.
The spin-off is due to take place in the first quarter of 2016.