By Svea Herbst-Bayliss
BOSTON, Feb 23 (Reuters) – Activist hedge fund Barington Capital Group on Monday nominated its own chief executive and another candidate as independent directors for The Eastern Co , hoping to boost the value of its 5.2 percent stake in the manufacturing and industrial company.
Two weeks ago, the New York-based investment firm told the Naugatuck, Connecticut-based maker of industrial hardware that it was fed up with waiting for change and would move ahead with a proxy contest. On Monday Barington nominated its founder James Mitarotonda, who currently sits on three boards, and Michael McManus, former President and chief executive officer of medical devices manufacturer Misonix, as its candidates for The Eastern Co’s board.
A spokesman for The Eastern Co was not immediately available for comment.
Barington has said it is worried that the 157-year old company is too set in its ways. It has not added a new member to its five-person board since President Bill Clinton moved into the White House. Chief Executive Leonard Leganza, said Eastern does not like to respond to possible offers to merge that are made by email. Serious contenders would make their approach by letter, he said in an interview with the Republican American of Waterbury, Connecticut.
According to a filing made with the Securities and Exchange Commission, Barington sent its notice to Leganza about the directors by overnight letter.
Last week Barington reached an agreement with specialty chemicals company OMNOVA Solutions Inc to add two board members, Mitarotonda and Joseph Gingo, along with OMNOVA representative Janet Giesselman.
Barington is a one of a handful of hedge funds that are taking more robust stances at companies by demanding board seats, asking for share buybacks and suggesting spin-offs or mergers. Activist funds have attracted fresh capital in the last months as investors hope for strong returns, but 2015 has gotten off to a rocky start with these types of funds losing 3.97 percent in January, data from eVestment show.
(Reporting by Svea Herbst-Bayliss; Editing by David Gregorio)
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