In the latest news from Purple and its largest shareholders, Coliseum Capital, the firm has rejected a settlement proposal from Purple’s special committee of the board of directors of Purple that seeks to “treat all parties fairly,” among other things.
In September 2022, Coliseum sought to buy the stock of Purple that it did not already own, at a price the special committee says it continues to believe does not reflect the long-term value of the company. Only a few days after the special committee publicly announced that it had rejected Coliseum’s acquisition proposal, Coliseum disclosed its intention to nominate a competing slate of director candidates at the company’s 2023 annual meeting of shareholders (the “2023 annual meeting”).
Since then, the special committee has made several settlement proposals to Coliseum, culminating in a March 9 proposal, all of which Coliseum has rejected.
The special committee’s settlement proposal included the following provisions:
- Coliseum would have the right to identify three of the six non-management members of a seven-member board.
- The other three non-management seats would be filled by two existing independent directors and a new director who is a significant shareholder. In addition to Dawn Zier, who already announced her intention not to stand for election at the 2023 annual meeting because of other commitments, two other current directors would retire at or before the 2023 annual meeting.
- Coliseum Managing Partner Adam Gray would become chairman of the board.
- The special committee would name one of the existing incumbent independent directors as lead independent director.
- Coliseum would commit to customary standstill provisions to provide stability for the company for approximately 18 months.
“In response to Coliseum’s multiple attempts to take over the company without the payment of an adequate control premium, the special committee has been seeking a resolution that serves the best interests of all shareholders. We would like to ensure that the public shareholders, who own approximately 55% of Purple, continue to have influence over the company and a voice in its governance,” says Dawn Zier, chair of the special committee of the Purple board of directors. “Unfortunately, Coliseum has rejected our proposal, which provided that Coliseum-nominated directors would fill three of the six non-management director seats on the Purple board, giving them influence over the board in proportion to their ownership stake in the company. We will continue to work towards reaching a solution that treats all parties – including Coliseum – fairly.”