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Zarlink refuses to back down from proxy battle

Posted: 08 Jul 2008 ?? ?Print Version ?Bookmark and Share

Keywords:proxy battle? hedge fund firm? National Bank Financial?

Canada-based Zarlink Semiconductor, a manufacturer of communications chips, is up for a battle a proxy battle from hedge fund of National Bank Financial.

Zarlink received a letter from Scott Leckie, an employee of National Bank Financial, which acquired Leckie's previous employer, Aquilon Capital, a hedge fund management firm. According to the letter, Leckie manages or control 5.2 percent of Zarlink's outstanding shares, on behalf of the hedge fund managed by National Bank Financial.

Leckie in his letter, called for the replacement of five company directors with five unnamed nominees, and the replacement of the CEO and chairman of the board, in order to give the hedge fund full control of the board. The letter outlines five areas to support the request for change, and threatens a proxy fight to attain board control if Zarlink does not comply. The letter also requested a meeting to present the proposal to Zarlink's board of directors.

Moreover, the letter stated that the company has continued to miss sales guidance. And it is prepared to declare the Legerity acquisition a failure after only 11 months.

"This is a hedge fund that owns just five percent of the company seeking an opportunity to generate a short-term gain, without any regard for the longer-term opportunities for the majority of our shareholders," said Kirk Mandy, president and CEO, Zarlink. "We believe Mr. Leckie is intentionally misstating the financial position of Zarlink, our product strategy and market realities to further the hedge fund's agenda and destroy one of the few remaining Canadian-based high tech companies."





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