M2 Capital Sets the Record Straight On CeWe Color.M2 Capital Increases Shareholding in CeWe Color M2 Capital Representative Resigns from Supervisory Board Supervisory board The board of directors that represents stakeholders in the governance of the corporation. of CeWe Color NEW YORK New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of -- M2 Capital Management, L.P.("M2") today published the following response to the various press releases, shareholder circulars and media comments issued by CeWe Color Holding AG ("CeWe" or the "Company") regarding M2 Special Opportunities Master, L.P.'s call for an Extraordinary General Meeting ("EGM EGM Electronic Gaming Machine EGM Electronic Gaming Monthly EGM Extraordinary General Meeting EGM Expert Group Meeting EGM Estudio General de Medios (Spanish: General Means Study) EGM Emergency General Meeting ") of CeWe shareholders. M2 also today announced that accounts managed or advised by M2 now own 10.29% of CeWe's issued share capital and that, following recent events, M2 representative Mr. Sebastian Freitag resigned from the CeWe Supervisory Board yesterday. CeWe's deliberately misleading statements have claimed that M2 has requisitioned an EGM in order to seek the payment of a one-off dividend of [euro] 37-120 million. Furthermore, the Company has said that such a payment is not possible with the Company's current capital structure and would result in redundancies and closures. Let's look at the facts: 1) Extraordinary General Meeting M2 Special Opportunities Master, L.P.'s letter to the Company of January 25, 2007, regarding the calling of an EGM actually proposes three agenda items only: * The removal of Mr. Hartmut Fromm, Dr. Fritz Adolf Fritz, generally called Dr. Fritz (Munich, ? – Estonia, 1918), was a hypothetical German surgeon whose spirit has allegedly been channeled by several Brazilian psychic surgeons, starting with José (Zé) Arigó in the 1950s and continuing up to the present. Kroger, Dr. h. c. Manfred Bodin, and Prof. Dr. Hans-Jurgen Appelrath as Supervisory Board Members * The election to the Supervisory Board of four new members, for which nominations of suitably experienced and skilled individuals will be made in advance of the EGM * A vote of No-Confidence in Dr. Rolf Hollander, Mr. Andreas F. L. Heydemann and Mr. Michael Wefers as members of the the Management Board The background and rationale to these proposals are set out in detail in the letter. However, the Company has still not published this letter and shareholders have therefore not been properly informed of the reasons for the calling of the EGM. This and other recent correspondence between M2 and the Company has therefore been made available by M2 at www.fixcewecolor.com so that interested parties can independently judge the facts for themselves. The Company has still not indicated when the EGM will take place. Furthermore, M2's ex-Supervisory Board representative - Mr Sebastian Freitag - is not aware of any Board meeting or Board discussions taking place to discuss the call for an EGM, despite requests for such a meeting. This is only the latest in a stream of corporate governance Corporate Governance The relationship between all the stakeholders in a company. This includes the shareholders, directors, and management of a company, as defined by the corporate charter, bylaws, formal policy, and rule of law. abuses, and is one of the many reasons why M2 has been forced to resort to calling a full shareholders' meeting shareholders' meeting n. a meeting, usually annual, of all shareholders of a corporation (although in large corporations only a small percentage attend) to elect the Board of Directors and hear reports on the company's business situation. . 2) Inappropriate Capital Structure M2's suggestion of a larger dividend payment than the Management and Board are currently proposing is one of a number of actions proposed by M2 in letters to CeWe's Chairman (available at www.fixcewecolor.com), and is based on a very straightforward analysis of the Company's financial position. Following CeWe's Q3 2006 results, analysts' estimates indicate that CeWe is expected to have 2006 year end retained earnings Retained Earnings The percentage of net earnings not paid out in dividends, but retained by the company to be reinvested in its core business or to pay debt. It is recorded under shareholders equity on the balance sheet. of approximately [euro] 70 million, to have generated operating free cash flow of approximately [euro] 30 million, to have minimal long term debt of approximately [euro] 5 million by the end of the year and to have cash balances of approximately [euro] 20-25 million. CeWe has minimally revised its capital expenditure plans to indicate CAPEX of approximately [euro] 30 million per year from 2007 and could spend up to [euro] 15 million on the current share repurchase Share Repurchase A program by which a company buys back its own shares from the marketplace, reducing the number of outstanding shares. This is usually an indication that the company's management thinks the shares are undervalued. programme. The Company is therefore clearly overcapitalised. Furthermore, the forward five year CAPEX plans and committed acquisition war chest of [euro] 50 million give no reason to believe that this situation will not recur in future years, despite the further recent downward revision in earnings guidance by the Company. CeWe need not adjust any of its recently stated investment plans in order to comfortably pay a dividend of [euro] 5 per share, or [euro] 35 million in total. This is exactly what M2 suggested be discussed by the Company's Board. Hardly the 'massive debt-financed special dividend' that Company statements have suggested. M2 welcomes the share repurchase program, which is a step in the right direction and has been suggested by M2 for over a year. However, such a program must be effective and accretive in order to create shareholder value. The program has been structured in a way that makes it unlikely to succeed as the Company is only offering to buy back shares at a discount to the market price and before the announcement of any dividend payment for 2006. The failure to cancel the redeemed shares also means that the program will be inefficient and not accretive for shareholders. 3) Comments David Marcus
David Marcus is an Irish Jewish editor who has been a lifelong advocate and editor of Irish-language fiction. of M2 commented: "The unfounded allegations being thrown at M2 are an attempt to muddy the waters and divert shareholders' attention away from the real issues at stake here. This public company is behaving like a private company and abusing its governance responsibilities." "CeWe came to us in 2005 in New York looking for Looking for In the context of general equities, this describing a buy interest in which a dealer is asked to offer stock, often involving a capital commitment. Antithesis of in touch with. investors. We are long term shareholders committed to value creation in all senses and for all stakeholders Stakeholders All parties that have an interest, financial or otherwise, in a firm-stockholders, creditors, bondholders, employees, customers, management, the community, and the government. . Over the past 2 years, the Years, The the seven decades of Eleanor Pargiter’s life. [Br. Lit.: Benét, 1109] See : Time management and the family trustees have sold over [euro] 50 million of CeWe Color stock. Over the same period, management has issued two major profit warnings and CeWe has been one of the worst performing stocks in the market. Meanwhile, we have consistently added to our position." "CeWe is a great company with a bright future but its potential needs to be unlocked quickly or it will lose its opportunity in the digital environment. As you can see from the documents published on www.fixcewecolor.com, we have tried every means possible to make this company sit up and listen, but arcane ar·cane adj. Known or understood by only a few: arcane economic theories. See Synonyms at mysterious. [Latin arc governance structures and incompetent incompetent adj. 1) referring to a person who is not able to manage his/her affairs due to mental deficiency (lack of I.Q., deterioration, illness or psychosis) or sometimes physical disability. business management have frustrated frus·trate tr.v. frus·trat·ed, frus·trat·ing, frus·trates 1. a. To prevent from accomplishing a purpose or fulfilling a desire; thwart: us at every turn." "This is ultimately about the use of shareholders' capital. CeWe is not a bank - if it has excess capital, it should be returned to the owners. By hoarding its "cash pile" and restricting cash flow, this management has damaged its growth potential and its shareholders. This has cost hundreds of employees their jobs and cost investors millions of Euros in losses." "A number of other major shareholders have expressed the same concerns as us and agree that change is long overdue OVERDUE. A bill, note, bond or other contract, for the payment of money at a particular day, when not paid upon the day, is overdue. 2. The indorsement of a note or bill overdue, is equivalent to drawing a new bill payable at sight. 2 Conn. 419; 18 Pick. and more necessary than ever. It is in everyone's interests that a date be set for an early EGM so that these issues can be discussed openly." For further information, please visit www.fixcewecolor.com |
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