Activists Move a Little Closer to Change At A. Schulman

Ramius Capital Group LLC on Thursday succeeded at getting two candidates elected to the board of A. Schulman Inc., a $566 million stock market capitalization paint and plastics company that the New York-based hedge fund has been pressing to complete a strategic review that could result in a sale of the business.
The winning candidates backed by the dissident investor group, Michael Caporale and Lee Meyer, filled seats vacated by James Karman and Joseph Gingo. The latter is A. Schulman's chief executive. The dissidents had hoped to force the Akron, Ohio, company to auction to itself or consider other changes to improve stagnating shareholder value. In various government filings, the activist investors have raised concerns about the company's performance and had originally nominated four candidates for board nomination but later reduced the number to a pair they believed were experts in related areas.
Although A. Schulman's CEO was forced off the board, Ramius has indicated its intent to find a way for him to rejoin, though not as chairman or a voting member of the special committee formed to explore strategic alternatives. Gingo will become a nonvoting member of the strategic review committee, according to a Ramius spokesman. According to an Institutional Shareholder Services Inc. report issued Jan. 4, Ramius Capital suggested expanding the board by one member so he can maintain a seat.
The proxy contest followed the effort of another activist investor, James Mitarotonda's Barington Capital Group LP, who had launched proxy contests and settled with the company in the past. A. Schulman announced on Nov. 16 that it formed a committee to consider strategic alternatives such as a sale. A. Schulman also announced in November that chief executive Terry Haines was stepping down.