Orthofix cautions shareholders to consider Ramius' motives at special meeting on April 2

By Lisa Kerner

Charlotte, N.C., March 17 - Orthofix International NV said it believes shareholder Ramius LLC "exhibited poor judgment in the nomination of unqualified and problematic individuals" for election to the company's board of directors at a special meeting on April 2.

The special meeting was called after Ramius delivered shares representing about 55% of the company's outstanding stock in support of such a meeting for the purpose of making changes to the board.

In a letter to its shareholders on Tuesday, Orthofix said the activist hedge fund wants to replace four current members of Orthofix's board with four of its hand-picked nominees.

Orthofix asked shareholders to consider whether Ramius has a plan for Orthofix or if it is "simply looking to pick a fight" to maximize short-term gains.

"Ramius is an opportunistic, activist hedge fund that seeks to gain control of nearly half of the company's board seats, despite the fact that they own just over 5% of Orthofix common shares outstanding," Orthofix said in the letter.

As previously reported, Orthofix opposed Ramius' nomination of Steven Lee to the company's board of directors. Lee is president of SL Consultant Inc., a private investment firm and hedge fund, as well as the founder of PolyMedica Corp.

He left the medical products company in 2002 following a Medicare fraud investigation by the Department of Justice, according to Orthofix.

Orthofix, a Curacao, the Netherlands Antilles-based diversified orthopedic products company, had also called into question the qualifications of nominee Peter A. Feld, a 29-year-old Ramius employee.

Ramius said previously that it wants to remove chairman James Gero, Peter Hewet, Alan Milinazzo and Walter P. von Wartburg from the board and replace them with, in addition to Lee and Feld:

• J. Michael Egan, chief executive officer of Steadman Hawkins Research Foundation, an orthopedic research organization; and

• Charles T. Orsatti, managing partner of Fairfield Capital Partners, Inc., a private equity fund.

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