Aerojet chief facing probe as he launches proxy fight

Bloomberg

Aerojet Rocketdyne Holdings Inc. said it’s investigating Executive Chairman Warren Lichtenstein and accused him of launching a proxy fight in an effort to maintain his board position.
An internal probe involving Lichtenstein is being conducted under the oversight of a committee of independent directors, the company said in a statement. The investigation is not related to Aerojet’s operations or financial reporting, the company said without providing additional details.
The disclosure came several hours after Lichtenstein’s investment firm, Steel Partners Holdings, revealed it would seek to replace several of the defense firm’s directors, including Chief Executive Officer Eileen Drake. Aerojet said it believes the “disruptive proxy contest” is driven by Lichtenstein’s “personal concerns and desire to secure his board position and gain leverage in the context of the company’s internal investigation.”
Steel Partners, one of Aerojet’s top shareholders, said it questioned the “motivation and timing” behind the disclosure of the investigation into a dispute between Lichtenstein and Drake.
“The timing suggests this was in retaliation to our decision to leave certain members of management and four incumbents off Steel Partners’ slate,” the firm said in an emailed statement. “We fear certain executives are so focused on their own financial interests that they issued this misleading disclosure.”
The discord deepens the company’s troubles at a time when its future is uncertain. The Federal Trade Commission is suing to block Aerojet’s pending $4.4 billion sale to Lockheed Martin Corp., contending it would stifle competition. Lockheed has less than 30 days to decide whether to fight the regulator, or walk away from the merger.
Aerojet shares have tumbled 17% this year.
Steel Partners proposed a slate including three new director candidates: Heidi Wood, an executive vice president at CAE Inc.; Aimee Nelson, a finance professional; and Joanne Maguire, a retired aerospace executive. The firm is also nominating Lichtenstein and three existing directors, according to a regulatory filing.
The overhaul is intended to ensure Aerojet “is optimally positioned to continue the business as a standalone entity in the event the transaction is not consummated,” the investor said in the filing.
The New York-based fund said it owns a 4.9% stake in Aerojet, which would make it the third-largest shareholder, according to data compiled by Bloomberg. Lichtenstein joined the board of Aerojet’s predecessor, GenCorp, in 2008 as part of a settlement that saw two other Steel Partners nominees appointed as well.