Bulldog Investors, managed by Phillip Goldstein, Andrew Dakos and Steven Samuels, has won important backing from proxy advisory firm International Shareholder Services (ISS) as it attempts to have Goldstein (pictured) and Dakos elected to Hill International Inc (NYSE:HIL)’s board of directors through a proxy vote. Bulldog Investors, voted as one of the top ten activist hedge funds by Activist Insight in early 2014, has beneficial ownership of 2.79 million shares of Hill International according to a 13D filing on May 5, a 5.53% stake in the company. It reported no ownership in the company as of March 31.
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Follow Phillip Goldstein, Andrew Dakos And Steven Samuels's Bulldog Investors
The May 5 filing by Bulldog Investors followed a flurry of activity on May 4, as private equity firm DC Capital Partners LLC (not to be confused with Douglas Dethy’s DC Capital Partners LP) sent a letter to Hill International Inc (NYSE:HIL) President and CEO David Richter, in which it proposed to buy the company for $5.50 per share and take it private. Also a shareholder of Hill International’s, DC Capital Partners LLC expressed satisfaction with how the construction management firm rebounded from the liquidity crisis it suffered in Libya, but also cautioned against the company’s overall exposure to the Middle East. The proposed purchase set a premium of 40.7% on Hill International’s shares at the time, though they shot up by 24% on May 4 on the news.
Hill International Inc (NYSE:HIL) wasted little time in rejecting the offer however, doing so on May 5. Not only that, the company’s board also adopted a three-year poison pill at the same time, ostensibly to protect the longterm interests of shareholders, without actually seeking the approval of those shareholders for that protection. That action, along with the company’s prolonged underperformance (shares are down by 2% over the past ten years and 17% over the past year, despite the recent spike) were among the factors cited by ISS in its May 29 report that recommended shareholders vote to put Bulldog’s candidates on the board and bring some much-needed new perspective to it.
Of course, while ISS is certainly respected and influential, its backing hardly guarantees success. The firm also supported the election of two of Trian Partners’ four nominees in that fund’s proxy fight with E I Du Pont De Nemours And Co (NYSE:DD), while urging shareholders to withhold their votes for DuPont’s own nominees. However, all of DuPont’s nominees gained election while all four of Trian’s were defeated. On the other hand, the advisory firm did back Rehan Jaffer’s H Partners in its own proxy battle with Tempur Sealy International Inc (NYSE:TPX), which H Partners won in a rout.
Peter Schliemann’s Rutabaga Capital Management owns one of the largest positions in Hill International, consisting of nearly 3.57 million shares as of March 31, and could play an important role in the proxy vote. Skylands Capital and Royce & Associates also hold notable positions.
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