Clarus board nominees win key backing

Reuters Company News
By Tom Johnson

NEW YORK, May 15 (Reuters) - A key adviser to institutional investors on Wednesday backed Clarus Corp.'s (NasdaqNM:CLRS - News) board nominees over a dissident shareholder slate, saying the opposition group's case was not compelling enough to justify its control of nearly half the software provider's board.

Institutional Shareholder Services in its written decision lauded the dissident group's stated objective of exploring strategic alternatives, including a possible sale of the company, to try and stem Clarus' cash burn rate and reverse the firm's stock slide.

However, the Rockville, Maryland-based firm said ultimately the group did not offer enough specificity about its plans to warrant three seats on the company's seven-member board.

"While Clarus is clearly going through troubled times and could potentially use assistance, in the absence of more clarity regarding the dissidents' proposed plan of action, we do not believe it is in shareholders' best interests to replace the management nominees at this time," ISS said in its report.

Clarus announced earlier this month that it had hired U.S. Bancorp Piper Jaffray as its financial advisor and entered preliminary discussions on a "value-enhancing strategic transaction" with an unnamed party as part of its ongoing efforts to boost shareholder value.

The dissident group, led by shareholder Warren Kanders, has argued that Clarus should stop talks on any merger deal until after the shareholder vote at the annual meeting on May 21. The group, which owns about 5.6 percent of Clarus' stock, has said it is better qualified to either sell or liquidate the company.

Shares of Clarus were down 17 cents, or 3.0 percent, at $5.58 on the Nasdaq in Wednesday afternoon trade. The shares last week had risen to their highest level since January, but remain well below their 52-week high of $8.91.

Printer Friendly

Email Page

Sponsor Message