Ryerson's 11 incumbents re-elected to board; Harbinger says vote signals preference for certainty

By Lisa Kerner

Charlotte, N.C., Aug. 23 - Ryerson Inc. said all 11 of the company's nominees were re-elected to the board of directors at its annual meeting on Thursday.

Stockholders also ratified the selection of Ernst & Young LLP as Ryerson's independent registered public accounting firm for 2007 and approved the Annual Incentive Plan. Voted down was a stockholder proposal regarding repeal of provisions of or amendments to the company's by-laws, if any, adopted after Jan. 1, 2006 and prior to the 2007 annual meeting. Stockholders also rejected a stockholder proposal to keep at least six and no more than 10 members on the board.

"We now look forward to giving Ryerson's stockholders the opportunity to vote on the Platinum Equity transaction for $34.50 per share at a special meeting that will be scheduled in the coming months," chief executive officer Neil Novich said in a company news release.

"In the meantime, we will continue to focus on improving our business and implementing our strategic plan on behalf of our stockholders."

Final results of the stockholder vote are expected within two weeks.

Harbinger Capital Partners Master Fund I, Ltd. and Harbinger Capital Partners Special Situations Fund, LP, which had sought to make changes to the board, said they were pleased that Ryerson's stock has returned 31% since they disclosed their slate of nominees in January.

The investment firms issued a statement in response to the vote results.

"As fear and volatility roiled the capital markets in recent weeks, [Thursday's] vote ceased to be about who was best equipped to lead this company. It became about the need for certainty versus the desire for opportunity," Harbinger managing director Larry Clark said in the statement.

"If the Platinum Equity transaction is completed on its announced terms, one quarter of a billion dollars of stockholder wealth will have been created," Clark added. "That's more value than the company created on its own over the previous eight years. Regardless of [Thursday's] vote, this is a victory for stockholders by any measure."

Under the agreement with Platinum, an affiliate of the Beverly Hills, Calif.-based private equity firm will acquire all of the outstanding shares of Ryerson's common and convertible preferred stock for $34.50 per share in a $2 billion transaction that will take the company private.

It was previously reported that Ryerson and Harbinger had both reached out to the company's stockholders to gain support for their respective nominees.

Ryerson's board sent its letter to Harbinger's nominees - Gerald Morris, Larry Liebovich, Eugene Davis, Daniel Dienst, Keith Butler, Richard Kochersperger and Allen Ritchie - asking them to "emerge from Harbinger's shadow and explain exactly why you deserve to be directors of Ryerson."

Harbinger asked shareholders if they trusted Ryerson's board to maximize value and posted related information on a dedicated Web site (maximizeryersonvalue.com). The investor, with a reported 9.5% stake in the Chicago-based metal processing company, believes CEO Novich wanted shareholders to save his job.

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