Last month, the anti-merger group, which calls itself the Computer Horizons Full Value Committee, announced that two independent proxy advisors–Institutional Shareholder Services and Glass Lewis & Co–had advised against the merger. The groups said the merger would water down CHC’s most promising service lines with Analysts International’s staffing-based business.
The Committee also has said that the merger doesn’t properly account for CHC’s better balance sheet.
CHC, however, contended that the proxy reports overlooked the strategic rational of the merger and would have little impact on the shareholder vote. In several letters to shareholders last month, the company said the merger would provide the necessary scale to compete in the IT services market.
Analysts International also last week announced that John Buckingham, president of Al Frank Asset Management and editor of investment newsletter The Prudent Speculator, had voiced his support for the merger.
But the Committee’s campaign appears to have influenced enough votes to block the deal. The votes will be tabulated and certified in two or three business days, CHC said.
In a statement, CHC CEO and chairman William Murphy said the company was disappointed by the vote but will continue to look for ways to increase shareholder value.
Analysts International president Jeff Baker said that the merger was definitely in its own strategic interest, with 97% of its voting shareholders approving the merger. Baker said the company would continue to look for other merger opportunities in the sector.
Crescendo Partners president Eric Rosenfeld said the Committee would soon begin a process to replace the current CHC board at the next scheduled shareholder meeting on September 22.
CHC shares shot up 18% to close at $4.20 on extremely heavy trading on Friday. Analysts International shares dropped 14% to $3.06 on similarly heavy trading.
