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Rofin releases open letter in ongoing row with shareholder T
he dispute between Rofin-Sinar Technologies and its shareholder Silver Arrow Capital Advisors has
escalated, with Rofin issuing a letter to all its shareholders responding to Silver Arrow’s demands to elect members to Rofin’s board of directors. Investment firm Silver Arrow, which owns nine per cent of Rofin, released an open letter in October 2015 criticising Rofin’s management strategy as a reason for what Silver Arrow felt was underperformance in Rofin’s stock over the past five years. Silver Arrow intended to nominate three individuals for election to the Rofin board of directors at the 2016 Rofin annual meeting of shareholders. These would replace three of Rofin’s directors standing for re-election. Rofin has offered to appoint one of Silver
Arrow’s three proposed candidates, Gebhard Rainer, but rejected the other two candidates. In the letter to shareholders, Rofin stated that one of Silver Arrow’s candidates would be unsuitable for appointment to the board because of ‘a lack of any meaningful business experience’, while the other proposed nominee had ‘a questionable track record of focusing on short-term results at the expense of sustainable value creation, and an unwillingness to provide requested professional references from his prior employers’.
components. The appointment of Bunis, whose term will expire in 2018, expands the Rofin board of directors to eight members. Silver Arrow released a statement in response to the appointment, saying the investment firm was ‘extremely disappointed’ that Bunis had been added to the board of directors. ‘We have strong concerns with Rofin’s
‘ Silver Arrow also insists on the retirement of all three of Rofin’s directors’
corporate governance, in addition to our previous noted concerns with strategy, performance and capital allocation,’ the statement from Silver Arrow read. The investment firm questioned the decision to appoint Thomas Merk as CEO – Merk took over from Günther Braun in July 2015 – and also now Bunis, without them running for election until 2018. ‘We believe proper corporate governance would require both of these individuals to be elected by stockholders at the earliest opportunity, in this case the 2016 annual meeting of stockholders,’ Silver Arrow said.
Rofin has stated in its letter to shareholders that Silver Arrow responded to the laser company’s settlement offer ‘with a series of demands, legal threats and a
Rofin appointed Jenifer Bunis to the company’s board of directors in December 2015. Bunis has 30 years experience in the laser industry, working for Synrad for 20 years and, most recently, serving as vice president of business development for Laser Mechanisms, a firm supplying laser beam delivery
4 ELECTRO OPTICS l FEBRUARY 2016
“take-it-or-leave-it” offer that demonstrates that it [Silver Arrow] has no interest in reaching a mutually acceptable settlement’. Silver Arrow also insists on the retirement of all three of Rofin’s directors standing for re-election at the upcoming annual meeting, according to Rofin. ‘We are disappointed that Silver Arrow has rejected our constructive settlement offer and, in effect, refused to continue dialogue,’ Rofin’s statement read. ‘The company [Rofin] believes adding one of Silver Arrow’s proposed
Rofin Select Fiber for high-precision laser welding
candidates, Mr Rainer, to the board is a reasonable and acceptable way to add an individual that both Silver Arrow and Rofin deem suitable. We continue to prefer to avoid a disruptive and costly proxy contest and to instead stay focused on executing on our business plan, but we simply cannot engage in settlement discussions under the onerous terms and one-sided process that Silver Arrow demands.’
Rofin also accused Silver Arrow of making misleading statements in its press releases, notably concerning Carl Baasel and Dan Smoke, each a current director standing for re-election.
Rofin added that it has not withdrawn its settlement offer and remains open to reasonable settlement discussions with Silver Arrow.
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