CEO resigns, handing control of the company to dissidents who won half of the board seats.
The fight for control of ValueVision officially ended on Monday, and the rebels won.
The CEO of ValueVision Media resigned in the wake of last week’s bitterly fought shareholder election that handed half the board seats to dissident shareholders.
The departure of CEO Keith Stewart, who also resigned from the company’s board, gave control to the New York-based Clinton Group, a $1.5 billion hedge fund that represented dissident shareholders in last week’s board election.
Mark Bozek, a Clinton-backed director elected last week, was named CEO of ValueVision, an unprofitable TV and Internet shopping firm based in Eden Prairie that operates under the name ShopHQ. Bozek was a former executive of ShopHQ’s biggest competitors, the Home Shopping Network Inc. (HSN) and QVC Inc.
Stewart and three other board members were the last remaining members of a management team that opposed the election of new board members by the Clinton Group. After last Wednesday’s vote, the board was split four-to-four between management loyalists and new Clinton Group members.
But a fifth Clinton board nominee who was not elected last week, Ronald Frasch, has now been named to fill Stewart’s seat on the board. That gives control of ValueVision to the Clinton Group, because it now controls the CEO’s position and five of the eight board seats.
In an effort to bring the ValueVision-Clinton Group feud to an end, John Buck an incumbent ValueVision board member who was re-elected last week, described Bozek as “a pioneer and innovator in the retail and electronic retailing industries,” who had “a proven track record of building consumer brands and driving revenue at both HSN and QVC.”
ValueVision also said Monday that it had named Bob Rosenblatt as its nonexecutive board chairman. The previous chairman, Randy Ronning, was one of the incumbent directors who were defeated in last week’s shareholder voting.
The stock market seemed to view the change of control positively. ValueVision stock closed at $5.14 a share, up 16 cents, or 3.2 percent. Shares have risen 9.7 percent since last week’s shareholder vote.
Some details of the change of control remain unknown. Jared Levy, a ValueVision spokesman in New York, declined to say how large Stewart’s severance package would be, or to say when that information would be disclosed.
The change of control caps months of vitriolic debate. ValueVision’s management had urged shareholders to turn aside the Clinton Group’s slate of director nominees based on management’s five-year track record of improving revenues and reducing net losses, along with decreasing transaction costs and increasing online sales. Management, the company said, was “transforming a business that was seriously challenged and near bankruptcy into a growing and vibrant company.”
The Clinton Group attracted a following with its efforts to replace a majority of the ValueVision board members on grounds that the company was “a declining, third-place market-share player in a three-company market,” behind competitors HSN and QVC.
The Clinton Group criticized the board for defending the company’s reduced losses, and claimed that “the board should only be satisfied by consistent profitability and sustained value creation.”
The New York Times reported Monday that, when the Clinton Group challenge began late last year, ValueVision reached about 86 million homes via cable and satellite TV, while Home Shopping Network reached 95 million.
Bozek said that, under his leadership, the company would “evolve the business, creating more robust platforms that enable us to become a far more relevant player in the multichannel worlds of TV, online and mobile commerce and entertainment.”
He also promised to instill in ValueVision “a culture of accountability, respect and passion for the unique world of a ‘dollars per minute’ business.”
Steve Alexander • 612-673-4553