Dye & Durham Ltd.’s DND-T main dissident shareholder, Engine Capital LP, is already claiming victory in its campaign to overhaul the embattled Toronto company’s board, four days before the annual meeting.
The New York hedge fund, which owns 7.1 per cent of the stock, said in a release Friday that more than 63 per cent of the legal software company’s outstanding shares had voted on its proxy card that nominated six directors to D&D’s board. A majority of outstanding shares voted in favour of its nominees.
Based on the proxies deposited with the company, once Engine casts its ballots at the Dec. 17 annual meeting, it expects that its entire slate will be elected, the shareholder said.
Engine’s slate is running in opposition to the company’s seven-person slate.
The news from Engine Friday afternoon sparked a rally in D&D’s share price, which closed at $21.99 on the Toronto Stock Exchange.
Dye & Durham chair Colleen Moorehead said in a statement: “We are in receipt of the proxies, which are being reviewed. The results of the shareholder vote will be announced at the meeting on Tuesday.”
Engine founder Arnaud Ajdler said in a release: “We thank shareholders for their overwhelming support and hope to work with chair Colleen Moorehead to effectuate a smooth transition that will enable the new board to start partnering with the company’s terrific employees to serve its customers and enhance value.”
The proxy tabulations are not final vote tallies, which will only be counted at the meeting by the company’s scrutineers.
It has been a raucous 12 months for D&D, including three other governance challenges, a debt refinancing, a large staff cut and a continuing investigation by the Competition Bureau for alleged trade-restricting practices.
CEO Matt Proud stepped down last month after the board agreed to pay him about $10-million in severance, weeks after the company abandoned a sale process, blaming opposition from two large shareholders.
Earlier this month, proxy advisory services ISS and Glass Lewis both recommended shareholders withhold their votes for Mr. Proud and some other D&D directors, suggesting that investors instead vote for a blend of candidates from both slates.