TXI boardroom battle, US

TXI boardroom battle, US
24 August 2009

Management at the Dallas-based cement maker faces a new onslaught from the people who waged one of this decade’s most celebrated boardroom brawls. The challengers’ top target: TXI’s 73-year-old chairman, Robert Rogers, son of company founder and Dallas civic leader Ralph Rogers.

The latest offensive against TXI management comes from Shamrock Holdings, an investment firm in Burbank, Calif., that was founded by Roy Disney, Walt Disney’s nephew. Roy Disney and Shamrock’s chief executive, Stanley Gold, led a 2004 shareholder revolt against Walt Disney Co. boss Michael Eisner.

For two months, Shamrock, which owns about 10 percent of TXI’s stock, has been blasting what it calls the company’s "poor record of performance versus its peers" and bashing Rogers for running TXI as a "personal fiefdom." Moreover, it has nominated three board directors, and it’s trying to persuade shareholders to vote for its candidates instead of the incumbent directors backed by TXI management.

"It appears that Mr. Rogers fails to recognize that the shareholders own the company and that he and this board are elected to serve only at the pleasure and in the interests of the shareholders," Shamrock said in an Aug. 4 letter to TXI’s board of directors.

Rogers and Mel Brekhus, 60, TXI’s chief executive, struck back Aug. 20, defending their performance and saying the company is well-positioned for long-term growth in Texas and California.

TXI’s products have been used to build such local landmarks as Dallas City Hall and the new Cowboys Stadium. It also provides specially treated infield dirt for Rangers Ballpark in Arlington, as well as chalks and pitcher’s mound clays.

"Whether it is developing a long-term strategy to be the preferred low-cost supplier of cement, aggregates and concrete products in the attractive Texas and California markets or adjusting to the decline in demand resulting from the current recession, your board and management remain focused on enhancing long-term shareholder value," Rogers and Brekhus said in a letter to shareholders.

Shamrock argues that its board nominees could boost the company’s stock price, which is less than half its July 2007 level. Rogers and Brekhus say Shamrock may have bigger plans "for change of control of the company." Analysts say that could include an outright sale of the company.

Source: The Dallas Morning News
Published under Cement News