Activist shareholder Clinton Group Inc. of New York is targeting television and Internet home shopping company ValueVision Media Inc. of Eden Prairie with a campaign to replace its chief executive and appoint board members.
Clinton Group's funds own more than 5 percent of ValueVision, which operates the ShopNBC network and ShopHQ, according to a letter to the company's chairman, Randy Ronning. A copy of the letter, which was written by Clinton President Greg Taxin and dated Wednesday, was filed with the Securities and Exchange Commission.
ValueVision CEO Keith Stewart has missed targets and the company is underperforming competitors, according to the letter. Clinton Group offered to invest at least another $25 million at "a substantial premium to the stock price" if Stewart is replaced and new board members are appointed. The fund manager isn't seeking a board seat, though the letter refers to unnamed candidates the fund will recommend.
ValueVision defended the turnaround under Stewart's leadership in a statement Wednesday, and said it had been in discussions with Clinton since early September.
"We will take the time necessary to thoroughly evaluate the Clinton letter while continuing to focus on the successful execution of ValueVision's business plan," ValueVision said in the statement.
ValueVision shares fell 5 percent to $5.15 on Wednesday, giving the company a market value of $255 million. The shares have almost tripled this year, compared with a more than 3 percent decline for larger competitor HSN Inc.
Still, sales of $587 million for the year ended in February are down from a high of $782 million in 2008, the last year that the company reported an annual net profit, data compiled by Bloomberg show.
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