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Calgon Carbon reaches deal with dissident shareholder

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By Thomas Olson
Tuesday, March 12, 2013, 1:03 p.m.
 

Calgon Carbon Corp. reached an agreement with a dissident shareholder who was threatening to wage a proxy fight over nominees to the company's board.

The agreement on Tuesday was an apparent win for both sides.

Starboard Value LP, a New York investment firm with a 9.2 percent stake in the company, had sought to elect three outside nominees. The deal calls for the company to add two independent directors to its slate of nominees to be voted on at its annual meeting.

“It's an experienced slate of directors, and this wasn't contentious,” said David Rose, an analyst at Wedbush Securities Inc., Los Angeles. “So, I think both sides win.”

Management agreed to support one of Starboard's nominees, Louis Massimo, former executive vice president and chief operating officer of Arch Chemicals Inc., and one nominee suggested by the board, Donald Templin, senior vice president and chief financial officer of Marathon Petroleum Corp., Calgon Carbon spokeswoman Gail Gerono said.

If the two independent nominees and two others backed by management are elected, Calgon Carbon's board would increase to nine directors from eight. Longtime director Robert Cruickshank will not stand for re-election, the company said.

“It's too early to know what value they will add, but adding directors with an outside perspective and industry perspective is generally beneficial,” Rose said.

The company, which makes air and water purification products, will elect directors at its annual shareholders meeting May 1 at the headquarters in Robinson.

“Both individuals will further strengthen our board with their considerable operational and financial experience,” Calgon Carbon CEO Randy Dearth said in a statement.

“We believe they will make substantial contributions to the company, while serving the best interests of all of its stockholders,” a statement from Starboard CEO Jeffrey Smith said. He declined to elaborate.

Separately, Calgon Carbon amended its shareholder rights plan so that it is not triggered until an acquirer's stake reaches 15 percent, effective immediately. The threshold was 10 percent when the poison pill was adopted in 2005. At the threshold, the board may issue more shares to all but the aggressive acquirer, thereby diluting its stake.

The change gives Starboard room to buy more Calgon Carbon shares. The firm acquired nearly 2.8 million shares for $63.9 million through dozens of stock purchases from Nov. 20 through Jan. 18, according to a securities filing.

Thomas Olson is a staff writer for Trib Total Media; 412-320-7854 or tolson@tribweb.com.

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