Efforts by Nathan Kirsh, the largest shareholder in Magal Security Systems Ltd. (Nasdaq: MAGS; TASE: MAGS) with a 24.2% stake, to keep the company's current management in place, succeeded. At today's extraordinary general shareholders meeting, 60% of participating shareholders voted to keep the current board of directors.
Last week, Kirsh travelled to the US to meet with US investors who were seeking to oust Magal chairman Jacob Perry and five directors. He succeeded in persuading Clough Capital Partners LP and a Citibank broker, which own about 10% of Magal altogether, to change their vote. As a result, today's vote at Magal's headquarters in Yavne was a foregone conclusion, and the company felt comfortable enough to invite journalists to the occasion.
The extraordinary general shareholders meeting lasted less than 30 minutes. Twelve people were present, of whom seven were Magal representatives, including former chairman and CEO Jacob Even-Ezra, who currently owns 3.6% of the company. Perry and Magal president and CEO Eitan Livneh were not at the vote, butwaited in an adjacent room.
The shareholders meeting was conducted in English, and managed in a concrete manner by director Shaul Kobrinsky. The vote on the motion to remove the five directors was held at the beginning of the meeting. The results, most of which were sent in advance by shareholders who own a total of 4.6 million Magal shares, was 60% of voting shareholders were in favor of keeping the directors. Opponents, representing 3.3 million shares or 39.7% of those present, favored ousting the directors.
The meeting then voted on a motion by Kirsh to extend a $5 million loan to Magal to finance its current operations, provided that the directors stayed on. He asked the shareholders to let him increase his stake to over 25% through a rights issue that the company will hold. Kirsh could not participate in this vote, which was approved by 51.54% of the shareholders present, with 48.1% voting against.
Magal's share fell 4.1% at the opening on Nasdaq today to $2.79, giving a market cap of $30 million. The share price fell 2.8% on the TASE to NIS 10.70.
Published by Globes [online], Israel business news - www.globes-online.com - on August 12, 2010
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