NEW YORK–Sun Capital yesterday sent a letter to the board of directors of Furniture Brands International, addressing concerns the board has raised over Sun Capital’s interest in acquiring or at least controlling the board of directors.
Earlier this week, Sun Capital sent a letter to shareholders to address similar concerns. Sun Capital, a $10 billion private investment firm that owns roughly 9.5 percent of the furniture maker, has lobbied aggressively for three directors to be named to Furniture Brands’ board at its annual meeting May 1.
Meanwhile, Furniture Brands yesterday released preliminary first-quarter results of $477 million, compared with $557 million a year ago. Official results are scheduled to be released at the annual meeting.
In yesterday’s letter, Sun Capital calls Furniture Brands’ concern about the potential transfer of competitively sensitive information to Sun Capital’s portfolio companies in the industry “unfounded.”
Sun Capital stated that it remains willing to sign non-disclosure/confidentiality agreements and separate executives of its furniture holdings, but still allow Sun Capital to “share its furniture industry experience and broader restructuring expertise with Furniture Brands.”
Further, Sun Capital said that having an interested party on the board would not pose a conflict of interest. In the event a takeover happened, Sun Capital’s nominee, T. Scott King, an employee of Sun Capital, would recuse himself, the letter stated.
Sun Capital’s other two nominees, Alan Schwartz and Ira Kaplan, “are completely independent and have no prior relationship with Sun Capital. All of our nominees are absolutely committed to acting in the best interest of all shareholders.”
