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Pitney Bowes Inc. (NYSE:PBI) shares rose in Monday’s premarket trading as activist investor Hestia Capital Management proposes sweeping changes to company management.
The investor, which holds a 7.2% stake in the Stamford, Connecticut-based company, proposed 7 new candidates for the company’s board to counteract “value destruction” it accuses management of facilitating in recent years. Additionally, the activist is calling for the replacement of CEO Marc Lautenbach.
“As a result of their experience and insight, our candidates have already been able to identify steps for turning around the Company and quickly repairing its severely damaged credit rating,” Hestia CIO Kurt Wolf commented. “We look forward to announcing an interim Chief Executive Officer candidate, issuing a 100-day transition plan and sharing a detailed value creation strategy prior to the upcoming Annual Meeting.”
He added that he believes shareholders have suffered “a decade of dismal returns, driven by misguided strategy, failed execution and missed opportunities” under the direction of current management. As such, he is advocating for swift and decisive changes in 2023.
For its part, company leadership rejected many of the assertions and accusations leveled in Hestia’s proposal. Management aid that it has consistently engaged in “good faith dialogue” with Hestia and even offered to appoint two directors requested by the activist. However, these olive branches were rebuffed, according to the company.
“Hestia was unwilling to reach a reasonable compromise. Instead, both their current and prior public announcements demonstrate that they are more interested in fighting than in engaging in constructive conversations to benefit all shareholders, not just themselves,” the company’s rebuttal read. “Furthermore, throughout discussions with Hestia, they demonstrated a fundamental misunderstanding of the Company and have failed to articulate a strategy that would justify ceding control of the company to them.”
Shares of Pitney Bowes (PBI) rose 6.74% on Monday.
Read more on Hestia’s ongoing campaign for changes at the company.
This article has been updated to include the company’s comment.