HomeStreet defeats activist Roaring Blue Lion in proxy contest

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BOSTON (Reuters) – HomeStreet Inc defeated Roaring Blue Lion Capital Management’s campaign to unseat one director and install its own candidate, ending a two-year standoff between the financial services company and the activist investor, the company said on Thursday.

Three of HomeStreet’s nine directors stood for re-election at Thursday’s annual meeting and each received at least 80 percent of the votes cast by shareholders, according to a preliminary tally, the company said.

Chairman and Chief Executive Officer Mark Mason, lead independent director Donald Voss and independent director Sandra Cavanaugh were re-elected. Shareholders also rejected the fund’s call to split the chairman and chief executive roles.

A representative of Blue Lion did not respond to a request for comment.

Blue Lion, which had called for the lender to restructure itself, originally wanted to install two directors – its founder Charles Griege and Ronald Tanemura – but then amended its proxy statement to try to replace Voss with Tanemura.

Minutes before the meeting was scheduled to begin and after the largest shareholders had already cast their votes, Blue Lion withdrew the candidacy of Tanemura, HomeStreet said in a statement.

“We have a strong, independent Board that is making significant progress executing against our strategy of transforming HomeStreet into a leading West Coast regional commercial bank,” CEO Mason said in a statement.

Thursday’s outcome marks the seventh time this year that a proxy contest has been decided by a vote instead of a settlement, giving shareholders the final say over who sits on a company’s board. Shareholders backed management in six contests, including at HomeStreet, where Thursday’s result marks one of the proxy season’s largest majorities.

Proxy advisory firms International Shareholder Services (ISS), Glass Lewis and Egan-Jones, which often decide the votes of thousands of investors, all sided with management.

The company’s stock price has climbed 45 percent since January. ISS said because the board had made changes, including adding new directors and exiting the core of the mortgage banking segment, there was no reason to back the dissident.

Blue Lion, which owns a 6.4 percent stake of HomeStreet, has been invested with the lender since it first listed its shares in 2012. HomeStreet has branches on the West Coast. The fight broke into the open in 2018 when Griege tried to replace two directors. His campaign was derailed by improperly filed papers and was later dealt another setback by banking regulators.

Reporting by Svea Herbst-Bayliss in Boston; Editing by Chris Reese and Matthew Lewis

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