DEFA14A: Barnwell Industries Faces Board Takeover Attempt by Sherwood Group

Barnwell Industries urges stockholders to reject Ned L. Sherwood's attempt to replace the entire Board of Directors without offering a premium for control.

Summary

• Barnwell Industries is facing a consent solicitation from the Sherwood Group, led by Ned L. Sherwood, to remove the entire Board of Directors and replace them with five new individuals, including Sherwood.
• The Board of Barnwell believes that the Sherwood Group's actions are not in the best interests of the company or its stockholders.
• The Board recommends that stockholders do not sign the blue consent card from the Sherwood Group and instead sign and mail the WHITE Consent Revocation Card.
• Sherwood has been involved in disruptive campaigns against Barnwell since 2020 and seeks to appoint all or virtually all of the directors.
• The Board argues that Sherwood has no plan for the Company and that replacing the entire Board would jeopardize the Company's trajectory.
• The Board states that most of Sherwood's suggestions to reduce costs and improve efficiency have already been implemented.
• The Board is open to a settlement where the Sherwood Group would have appropriate representation in light of its 30% ownership interest, but is not prepared to give Sherwood sole control.
• Okapi Partners LLC has been appointed to assist stockholders with questions or revoking any consent of their shares.

Sentiment

Score: 4

Explanation: The document conveys a defensive stance against a hostile takeover attempt, indicating concern and uncertainty about the company's future. The tone is urgent and persuasive, aiming to sway shareholder opinion.

Positives

• The current Board is open to a settlement with the Sherwood Group that allows for appropriate representation.
• The Board believes it is well-equipped to pursue the Company's current business plan and strategies.
• Most of Sherwood's suggestions to reduce costs and improve efficiency have already been implemented.

Negatives

• The Sherwood Group's actions are causing unnecessary expenditure of corporate time and resources.
• The disruption from replacing the entire Board would put the trajectory of the Company in significant jeopardy.
• Sherwood has no plan for the Company and has never put forth any strategy or credible idea to enhance value.

Risks

• The Sherwood Group's consent solicitation could negatively impact the long-term value of stockholders' shares.
• Sherwood does not have a fiduciary duty to act in the best interests of the Company's stockholders.
• The Sherwood Group's actions could lead to instability and uncertainty within the Company.

Future Outlook

The Board remains open to a settlement with the Sherwood Group, but is not prepared to give Sherwood sole control of the Company.

Management Comments

• The board of directors and the management team of Barnwell Industries, Inc. are committed to implementing Barnwell's strategic plan for our Alberta energy assets and delivering significant value and returns to ALL stockholders.
• The Board strongly believes that the Sherwood Group's actions are not in the best interests of Barnwell and its stockholders.
• We continue to urge the Sherwood Group to abandon the disruptive consent solicitation that is once again causing unnecessary and ill-advised expenditure of corporate time and resources.

Industry Context

This announcement reflects a common scenario in corporate governance where activist investors seek to influence or take control of a company's board. Such situations often lead to increased scrutiny and potential changes in company strategy.

Comparison to Industry Standards

• Proxy fights and consent solicitations are a relatively common occurrence in the corporate world, particularly when a significant shareholder believes that the current management is underperforming or mismanaging the company.
• Companies like Procter & Gamble and Trian Fund Management have experienced similar proxy battles, where an activist investor sought to gain board representation to influence company strategy.
• The outcome of such battles often depends on the support of institutional investors and the persuasiveness of each side's arguments.

Stakeholder Impact

• The outcome of the consent solicitation will directly impact shareholders, as it will determine the composition of the Board of Directors.
• Employees may experience uncertainty and potential changes in company strategy depending on the outcome.
• The consent solicitation could affect the company's relationships with its customers, suppliers, and creditors.

Next Steps

• Stockholders are urged to reject the Sherwood Group's blue consent card and sign and mail the WHITE Consent Revocation Card.
• The Board will likely continue to engage with the Sherwood Group to seek a resolution.
• The Company will continue to pursue its current business plan and strategies.

Key Dates

Keywords

Barnwell Industries, Sherwood Group, Board of Directors, consent solicitation, proxy, stockholders, corporate governance, takeover, revocation