CPI shareholder Ramius says election isn't about forcing a sale

By Lisa Kerner

Charlotte, N.C., July 2 - Ramius LLC denied that it is seeking to oust the current management of CPI Corp. and force a sale of the company.

The 23% shareholder accused the company of making "false and misleading" statements in order to win votes at CPI's annual meeting on July 8.

"It has become increasingly clear to us that CPI and its management, including chairman of the board David Meyer, will say anything in order to win the director contest at next Wednesday's annual meeting," Ramius said.

According to Ramius, CPI falsely claimed that a Ramius representative on its board of directors had voted to approve Meyer's 2007 compensation.

Ramius is seeking the election of two candidates to CPI's board of directors - Ramius executive and current CPI director Peter A. Feld., and Joseph C. Izganics, a former senior executive at Home Depot Inc.

On Wednesday, both Ramius and CPI issued statements regarding Proxy Governance, Inc.'s recommendations in regards to the annual meeting.

Ramius said the proxy advisory firm recommended that CPI shareholders withhold their votes for the company's director nominees Turner White and James Abel.

The St. Louis-based portrait studio operator nominated for election, in addition to White and Abel, Paul Finkelstein, Michael Glazer, Michael Koeneke and David Meyer.

CPI said Ramius failed to say that Proxy Governance's conclusion recommended that CPI stockholders not support Feld and Izganics.

Shareholders show support

Shareholder Manley Asset Management, LP publicly offered its support for Ramius' board proposals on Thursday.

Manley Asset, which controls 237,000 CPI shares, said it believes "a more independent and balanced board with significant retail experience will best serve the company and its shareholders."

CPI announced on Wednesday that Ivan Capital Management, Inc. joined the company's two largest, unaffiliated stockholders, Century Management and its affiliate, Van Den Berg Management, and Lafitte Capital Management in pledging to vote their shares for CPI's director nominees. Century Management and Lafitte Capital have an approximately 23% stake in CPI.

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