13D weekly report - Oct 07, 2024 to Oct 11, 2024

EcoR1 Capital secured Board seat in Galapagos (GLPG)

Key Summary: On August 23, 2024, EcoR1 Capital (9.9%) announced plans to discuss company performance, operations, strategic opportunities, and governance, including Board composition, with management and the board. On October 6, 2024, the Board appointed Mr. Nodelman from EcoR1 Capital as a non-executive, non-independent director.

Market Cap: $2 billion | Galapagos NV, a biotechnology company, develops medicines focusing on oncology and immunology primarily in the United States and Europe. 

EcoR1 Capital

• On August 23, 2024, EcoR1 Capital (9.9%) stated that it intends to communicate with the management and board about a variety of topics relating to the company’s performance, business, operations, strategic opportunities and governance, including Board composition. Source
• On October 6, 2024, the Board appointed Mr. Nodelman from EcoR1 Capital as a non-executive, non-independent director, effective October 7, 2024. They also plan to nominate and recommend him for a four-year term as director at the upcoming shareholders' meeting.

Van Herk Investments

On November 2, 2021, Van Herk Investments (7.1%) provided notice to the company of its intent to nominate Mr. Dharminder Chahal for election to the board. Source

Starboard Proposes Elimination of Dual-Class Share Structure at News Corp (NWS)

Key Summary: On September 9, 2024, Starboard Value proposed eliminating News Corp’s dual-class share structure, criticizing the governance issues related to the Murdoch family's super-voting rights. They planned to file a proxy statement and seek shareholder support for this change.

Market Cap: $15 billion| News Corporation, a media and information services company, creates and distributes authoritative and engaging content, and other products and services for consumers and businesses worldwide.

• On September 9, 2024, Starboard Value announced it had sent a letter to News Corp shareholders proposing the elimination of the company’s dual-class share structure. Starboard criticized News Corp’s governance, highlighting issues with the Murdoch family's super-voting rights and internal family conflicts. The letter argued that extending these rights was unreasonable and exacerbated the company's valuation discount. Starboard planned to file a proxy statement with more details and sought shareholder support to address these governance concerns.
• On September 20, 2024, Starboard Value (4.6%) filed proxy materials seeking stockholder approval for a non-binding proposal at the 2024 Annual Meeting to eliminate News Corp’s dual-class share structure, allowing each share to have one vote. They believe this change will enhance shareholder value and governance. The Annual Meeting will also address the election of director nominees, the ratification of the accounting firm, and advisory votes on executive compensation and the dual-class proposal. Source
• On October 9, 2024, Starboard Value (4.6%) filed proxy materials seeking stockholder approval for its proposals.

Past

In October 2023, Starboard Value issued a presentation suggesting that News Corp should consider spinning off its online property businesses, estimating it could generate a $7 billion windfall for the company. Starboard believes that News Corp's current valuation of $12.6 billion "does not make sense" and suggests breaking up the business to increase shareholder value. The hedge fund sees potential in separating the digital real estate assets, such as Move Inc and REA Group, through a tax-free spin-off, which could lead to a significant increase in the company's share price.

Biglari Capital Corp nominated Board candidates to Cracker Barrel Old Country Store (CBRL)

Key Summary: On August 16, 2024, Biglari Capital Corp (9%) nominated Board candidates to Cracker Barrel Old Country Store, Inc.

Market Cap: $1.6 billion| Cracker Barrel Old Country Store, Inc. develops and operates the Cracker Barrel Old Country Store concept in the United States.

Background: 

• Biglari lost five proxy campaigns to elect directors in the FY 2011, 2012, 2013, 2014 and 2020
• On November 5, 2021, Biglari Capital Corp (8.7%) issued a letter to shareholders expressing its concerns on the performance of the company that it has lagged behind both the peer median and the S&P MidCap 400 Index since the onset of Covid-19 and since the 2020 shareholder meeting held on November 19, 2020. Further, it urged that the Board should consider a more aggressive dividend payout policy.
• On December 14, 2021, Biglari Capital Corp (8.7%) issued a letter to shareholders expressing its concerns on the performance of the company  It urged that the Board should consider a more aggressive dividend payout policy.
• On June 6, 2022, Biglari Capital Corp (8.8%) issued a letter to shareholders reiterating its concerns.
• On August 18, 2022, Biglari Capital Corp (8.8%) delivered a letter to the company nominating Jody L. Bilney and Kevin M. Reddy for election to the Board at the 2022 AGM. Source
• On September 28, 2022, Biglari Capital Corp entered into an agreement with the company, leading to the expansion of the Board from ten to eleven members and the appointment of their nominee, Jody L. Bilney. Source

Update:

• On August 16, 2024, Biglari Capital Corp (9%) nominated Milena Alberti-Perez, Julie Atkinson, Sardar Biglari, and Michael W. Goodwin for election to the Board at the 2024 annual meeting. On August 18, 2024, they submitted a supplemental nomination for Michelle Frymire, bringing the total number of nominees to five. Source
• On September 23, 2024, Biglari Capital Corp (9.3%) filed proxy materials seeking support for its nominees.
• On September 23, 2024, Biglari Capital Corp withdrew their nomination of Julie Atkinson and Michelle Frymire as nominees for election at the Annual Meeting. With the withdrawal, Biglari Capital Corp intend to solicit proxies to elect the remaining Nominees to the Board at the Annual Meeting. Source
• On October 1, 2024, Biglari Capital Corp filed proxy materials seeking support for its nominees.
• On October 8, 2024, Biglari Capital Corp. issued a letter to shareholders expressing concern over the company's declining market value, which has dropped over $2.9 billion since 2019. Despite ownership of 2,069,141 shares and attempts to highlight management failures, the Board's appointment of CEO Julie Felss Masino and her transformation plan have not restored confidence, leading to a 50.9% decrease in share price since her appointment. Biglari criticized the Board for its poor capital allocation decisions, including costly new stores and unsuccessful brand launches, which have resulted in significant losses. He emphasized the need for a Board overhaul and proposed focusing on core operations, halting new store openings, and improving existing store performance to regain customer traffic.

Murchinson Criticizes AGM Delay and Plans Governance Proposals for Nano Dimension (NNDM)

Key Summary: On January 22, 2023, Murchinson Ltd. (5.1% shareholder) demanded a special meeting to amend Nano Dimension's governance, remove CEO Yoav Stern and three directors, and appoint two new independent directors. Despite shareholder approval in March 2023, the company contested the meeting’s validity. Murchinson continued criticizing governance, the Board’s actions, and lavish spending, reaffirming its goal to replace the Board at the 2024 AGM. On October 9, 2024, Murchinson raised concerns about AGM delays and potential shareholder disenfranchisement, requesting ADS conversion and proposing director changes and governance amendments at the AGM.

Market Cap: $508 million | Nano Dimension Ltd., together with its subsidiaries, provides additive electronics in Israel and internationally. 

• On January 22, 2023, Murchinson  Ltd  and certain funds (5.1%) delivered a letter to the Board demanding that the company convene a special general meeting of shareholders  to allow shareholders to vote upon resolutions proposed by the Proposing Shareholders to improve the company’s corporate governance by way of (i) amending certain provisions of the Company's Amended and Restated Articles of Association, including to allow shareholders to fill Board vacancies and remove directors at a general meeting by a simple majority vote, (ii) removing several members of the Board, namely, the Chairman of the Board and CEO Yoav Stern, and current directors Oded Gera, Igal Rotem and Dr. Yoav Nissan-Cohen and (iii) appointing two new highly-qualified, independent and experienced director nominees, Kenneth H. Traub and Dr. Joshua Rosensweig, as directors of the company(such demand, the “Special Meeting Demand”). The Special Meeting Demand instructed the Board to immediately, and no later than February 12, 2023, call the Special Meeting, and hold it no later than 35 days thereafter, as required by the Companies Law. Source
• On February 13, 2023, Murchinson  Ltd  (5.1%) called on the company to hold a special meeting to remove four incumbent directors, including its chairman/CEO, and install two independent board members. Source
• On March 6, 2023, Murchinson Ltd issued a presentation outlining why it believes change is urgently needed at Nano Dimension.
• On March 6, 2023, Nano Dimension Ltd (14.5%) stated that it intends to engage in communications with the company regarding opportunities to enhance shareholder value and improve corporate governance, including through potential changes in the corporate structure, potentially, among other options, including changes to the composition of the Board. Source
• On March 9, 2023, Nano Dimension Ltd delivered a letter to the board proposing a non-binding indicative offer to acquire the remaining outstanding shares  for $18.00 per share in cash.
• On March 10, 2023, Anson Funds (5.1%) issued a letter to the Board to express its disappointment in the company’s apparent refusal to constructively engage with its shareholders. In addition, Anson Funds called on the board to implement a meaningfully larger return of capital program and expressed its concern that the company is overcapitalized and its belief that management’s recent actions highlight poor corporate governance at the company. It also urged the board to halt the proposed takeover of Stratasys, Ltd. Source
• At the special general meeting held on March 20, 2023, the shareholders voted in favor of the Proposing Shareholders’ proposals to (i) amend certain provisions of the company’s Articles of Association, (ii) remove four incumbent members of the Board, including Chairman and Chief Executive Officer Yoav Stern, and (iii) appoint two director nominees, Kenneth H. Traub and Dr. Joshua Rosensweig, as directors of the company. Although the Proposing Shareholders believe that the Special Meeting was valid, including that Messrs. Traub and Rosensweig were duly elected to the Board at the Special Meeting, the company is challenging the validity of the Special Meeting in Israeli court, which the Proposing Shareholders are vigorously defending. Most recently, the Israeli court issued an order stating that Messrs. Traub and Rosensweig shall serve as non-voting observers on the Board during the pendency of the litigation.
• In addition to the Israeli litigation, on March 27, 2023, the company filed a lawsuit against Murchinson Ltd and certain other third parties.
• On May 1, 2023, Murchinson Ltd (5.8%) filed a lawsuit against the company and certain other third parties, including Mr. Stern seeking to recover its costs and attorneys fees and punitive damages arising from the company's Complaint. Source
• On May 2, 2023, Anson Funds (6.2%) stated its belief that the allegations by the company contained in the complaint are without merit and intend to defend themselves. Source
• On June 27, 2023, Murchinson delivered a private letter to the Board expressing its concerns over the increased tender offer price for Stratasys shares and the lack of due process and shareholder approval. It criticizes potential plans for a hasty equity issuance that would dilute shareholders' interests.
• On July 20, 2023, Murchinson (5.9%) sent a letter to the Board expressing concerns about the delayed AGM and the Board's alleged attempts to disenfranchise shareholders. It also informed the Board of its decision to convert a portion of ADSs held by Nomis Bay into Ordinary Shares, which was completed on July 18, 2023. As a result, Nomis Bay now holds 1,500,000 ADSs and 3,000,000 Ordinary Shares.
• On July 31, 2023, Murchinson demanded the company to add resolutions to improve corporate governance at the AGM on September 7, 2023. This includes electing experienced and independent director nominees, amending the Articles of Association, and replacing/removing Board members. Source
• On August 17, 2023, Murchinson released an investor presentation detailing why they believe wholesale change to the Board is urgently required to restore accountability, address broken governance and drive shareholder value at the company. The Investor Presentation also details the Proposing Shareholders’ five-pillar plan to improve leadership, capital allocation and corporate governance at the company, which they believe can only be accomplished through a reconstituted Board. The Proposing Shareholders therefore encourage the shareholders to support the proposals to remove the incumbent directors, elect their independent nominees and improve corporate governance at the AGM, scheduled for September 7, 2023. The Proposing Shareholders believe their independent nominees who would join current non-voting directors Kenneth Traub and Dr. Joshua Rosensweig, have the right skill sets and expertise to put the company on the path to shareholder value creation. 
• On October 25, 2023, Murchinson (6.6%)delivered a letter to the company demanding that the company add to the agenda of the EGM of Shareholders scheduled to be held on December 13, 2023 various resolutions proposed by them, including resolutions to (i) remove Mr. Yoav Stern and Mr. Oded Gera from the Board, (ii) appoint two highly-qualified director nominees, Ms. Timor Arbel-Sadras, and Mr. Ofir Baharav (the “Murchinson Director Nominees”), to the Board, and (iii) amend certain provisions of the company’s Articles of Association, including the addition of a new Article relating to certain major transactions involving the company requiring shareholder approval. Source
• On December 7, 2023, Murchinson Ltd. sent a letter to the Board informing that it's converting some ADSs into Ordinary Shares to hold more than 5% of voting rights. This conversion is aimed at protecting shareholders' interests. Murchinson plans to demand a special shareholder meeting and propose a new article requiring approval for acquisitions over $50,000,000. These actions are taken due to the Board's lack of responsiveness and concerns about the CEO's recent actions and statements.
• On June 28, 2024, Murchinson Ltd (7.1%) issued an open letter to shareholders criticizing CEO Yoav Stern and the Board. They revealed that Mr. Stern and the Board recently took a company-funded trip to Alaska despite a recent 25% workforce reduction to cut costs. Murchinson suspects Nano might be in deal talks with Desktop Metal due to a recent spike in Desktop Metal’s stock price and urges the Nano Board to seek shareholder approval for any strategic deals. They also expect a ruling from the Israeli Court on the validity of the March 2023 EGM vote, where shareholders supported Murchinson’s proposals. Pending various lawsuits, Murchinson affirms its commitment to replacing the Board and Mr. Stern at the 2024 AGM.
• On October 9, 2024, Murchinson sent a letter to the Board, criticizing the delay in holding the AGM and expressing concerns that the Board may be attempting to disenfranchise shareholders by scheduling the AGM as late as possible under Israeli law. Murchinson requested the conversion of a portion of ADSs into Ordinary Shares and indicated its intention to submit proposals at the AGM, including nominating two to three new directors, removing current directors, and amending the Articles of Association to require shareholder approval for major transactions.