Orthofix, Ramius spin results of proxy advisory firm report; special meeting set for April 2

By Lisa Kerner

Charlotte, N.C., March 23 - Ramius LLC said RiskMetrics Group/ISS recommended that Orthofix International NV shareholders vote to elect three of the shareholder's nominees to the company's 10-member board and remove current chairman James F. Gero and directors Peter J. Hewett and Walter P. von Wartburg at a special meeting on April 2.

The proxy advisory firm recommended the election of Ramius nominees J. Michael Egan, Peter A. Feld and Charles T. Orsatti, according to a Ramius news release. Ramius had also nominated Steven Lee.

"RiskMetrics states, 'Without commenting on the qualification of incumbent nominees, we recommend shareholders vote for the removal of James Gero (director since 1995), Walter Wartburg (director since 2004) and Peter Hewett (director since 1992),'" Ramius partner Jeffrey C. Smith said in the release.

Orthofix said RiskMetrics' "split recommendation" in favor of three of the four Ramius nominees is a "common practice" because the "the burden of proof on the dissidents is lower."

While Orthofix had previously questioned the qualifications of Lee and Feld, RiskMetrics reported that although "Feld has the least company/sector experience, he represents a significant shareholder and as such his interests are likely to be aligned with other shareholders," Ramius said.

Ramius and Orthofix had also been at odds regarding a sale of Orthofix's Blackstone Medical division, which the company acquired in 2006.

Orthofix, a Curacao, the Netherlands Antilles-based diversified orthopedic products company, said that according to the RiskMetrics' report, "while Ramius had initially advocated for the immediate sale of the Blackstone division, analysts seems to be more supportive of the turnaround plan rather than an immediate sale."

Orthofix favors Proxy Governance

According to Orthofix, RiskMetrics does not require a detailed plan of action from Ramius while another proxy advisory firm, Proxy Governance, Inc., found the shareholder's lack of a plan to be a major factor that Orthofix shareholders should consider.

Proxy Governance recommended that Orthofix shareholders reject each of the proposals put forth by Ramius, Orthofix announced last week.

Alan Milinazzo, president and chief executive officer of Orthofix, said overall the recommendations made by RiskMetrics "seem inconsistent with their acknowledgement of the progress" the company has made.

Milinazzo said he is pleased with "the supportive recommendation issued by Proxy Governance."

As previously reported, Orthofix was forced to schedule a special meeting of shareholders 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.

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