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Chesapeake Corporation (NYSE:CSK)
rejected a $40/share proposal initiated by Shorewood Packaging in
October 1999, stating that Chesapeake's board found the proposal
inadequate. Relying on its own dead-hand poison pill and staggered board
takeover defenses, Chesapeake countered with a $16.50/share bid for
Shorewood and started litigation to block Shorewood's use of takeover
defenses. The results, as of the end of February 2000: Shorewood
abandoned its bid for Chesapeake and auctioned itself off to
International Paper for $21/share, while Chesapeake remains independent
with a stock price that has drifted from its pre-contest range in the
upper 20's to a current trading range in the low 20's.
NYSSA's Committee for Corporate Governance had
selected the Chesapeake-Shorewood contest for its Forum program in early
January to consider the effects of takeover defenses on opportunities
for value enhancement. Participants in the March 7th Forum will address
the three essential governance issues of investment decisions as they
apply to Chesapeake:
- Can shareholder value be materially increased by a change in
strategy or management?
- Can directors be relied upon to act in the best interests of
shareholders?
- Do shareholders have the effective ability to exercise their
rights?
Representatives of Chesapeake have been invited to
present their views and respond to questions. The meeting is open to the
public and the press, and arrangements can be made for teleconference
participation.
This program is sponsored by the Committee for
Corporate Governance and Shareholder Rights, chaired by Peter F.
Brennan, and will be moderated by Gary Lutin, the investment banker who
has been the adviser and co-sponsor of this and the previous National
Presto and Dun & Bradstreet Forums. |