Icahn's feud with Conduent heats up as activist denies plan to oust board

16 April 2019 21:35

Carl Icahn’s fight with Conduent intensified as Michael Nevin, an Icahn representative who resigned his board seat in protest of actions taken by Conduent Chairman William Parrett, denied that his departure was part of a premeditated plot by Icahn to overthrow the board.

"I resigned because I was fed up with being misled by the Chairman of the Board and tired of the lax governance practices that I observed during my tenure on the board — pure and simple," Nevin said in a letter dated April 12 and disclosed by the company today. "Any suggestion by Conduent that my resignation was somehow an attempt by my employer, Carl Icahn, to take control of the company’s board is unequivocally false.”

Conduent had described Nevin’s resignation on April 8, accompanied by a highly critical resignation letter, as part of a wider effort by Carl Icahn himself to gain control over the company, even though a standstill agreement prohibits Icahn from doing so via a proxy contest.

“We believe Mr. Nevin’s noisy resignation” and related discussions in which Icahn suggested Parrett step down, “represent an attempt to take control of the Company’s Board,” they said in an 8K filing with the US Securities and Exchange Commission on April 11. The company then challenged Nevin, and by extension Icahn, to “furnish the Company with a letter” stating whether or not he agrees with the statements made by the company.

Nevin did just that.

The new letter puts into focus an increasingly bitter feud between representatives of Carl Icahn and fellow activist Darwin Deason, and board members aligned with management.

“There will be a lot of War and Peace in this one,” predicted a source close to Icahn, asking not to be named.

The difficulty for Icahn is that under a standstill agreement reached in 2016 after Conduent was spun off from Xerox, the activist cannot mount a proxy fight or oppose any of the company’s director nominees while he has representation on the board.

With Nevin's departure, Icahn still has two representatives on Conduent’s board: Courtney R. Mather and Nicholas Graziano, and Deason has one seat. Incumbent management has five seats, enabling it to block opposition from the dissidents, at least for now.

“Their lawyers probably tell them there is nothing [the dissidents] can do,” said the source.

“But there is something they can do,” the source said, without going into detail.

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