ANALYSTS: CONTRARIAN GUARDS INTERESTS WITH SALTON BOARD MOVE.
NEW YORK-The addition of a portfolio manager to Salton's board of directors from another one of its largest shareholders is likely an attempt by that fund to guard its interests if there is a merger with Applica, industry observers said.
Applica is being acquired by its largest shareholder, Harbinger Capital Partners, which is also one of Salton's shareholders and has proposed that the two suppliers merge.
Jason Mudrick was recently elected to Salton's board of directors. He is a portfolio manager at Contrarian Capital Management, an investment firm based in Greenwich, Conn. Prior to joining Contrarian in 2001, Mudrick was an associate in the Mergers & Acquisitions Investment Banking Group at Merrill Lynch & Co. He volunteered to forego compensation for his services on the board of directors.
Contrarian owns approximately 2.6 million shares of Salton Common Stock, which is reportedly about 18.3 percent of the company's shares outstanding as of July 1.
There appears to be two openings on the board, with the retirement of William Rue and David Sabin, and Mudrick's election fills one of those slots.
"Contrarian would want to put someone on board to protect their interests so if the deal were structured, it would be advantageous to them," said Terry Dwyer, senior vice president with KDP Investment Advisors of Vermont, a high-yield research group.
"Harbinger will have to negotiate with Contrarian," said an analyst who asked not to be identified. "You don't want a disgruntled board member. They could screw things up and actually block your ability to move forward."
When Harbinger purchased 30,000 shares of Salton's Series A Voting Convertible Stock in June, Salton's board of directors appointed David Maura, a consultant to Harbinger Capital Partners Master Fund, as a director.
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|Title Annotation:||Jason Mudrick elected|
|Publication:||HFN The Weekly Newspaper for the Home Furnishing Network|
|Article Type:||Brief article|
|Date:||Nov 6, 2006|
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