Las Vegas ticketing group Tix Corporation has blocked an “activist stockholder” from nominating four new members to the company’s board.
Tix chief executive Mitch Francis said in an open letter to shareholders that the company, which provides discount ticketing services for concerts and shows via its Tix4Tonight brand, has been the target of an “ongoing activist campaign” over the past two years by stockholder Haren Bhakta and his HSB Capital Partners fund.
Francis said HSB – which claims to own about five per cent of Tix stock – is attempting to take control of the board and company as a whole and has now upped the ante by attempting to nominate four “unqualified” individuals for election at the 2019 annual meeting of stockholders. The company said the nominations are incomplete, and any votes in their favour will be discounted ahead of this year’s AGM.
Francis said Bhakta “lacks any relevant market-wide or industry specific experience and has no strategy for promoting any short or long-term value creation for Tix.” He claimed Bhakta has harassed staff members over the last two years and intentionally triggered the Tix net-operating-loss rights plan in a bid to buy shares at a lower price.
Francis advised shareholders to ignore correspondence from Bhakta and outlined the current leadership team’s successes, including improvements in share price, net income and cash flow in the first quarter of 2019.
Francis added: “Neither Mr. Bhakta nor HSB’s three additional nominees, Palak Bhakta, John Buckingham and Michael Fisk, have any background or experience that is relevant to Tix’s operations. None of them have ever operated a retail business; none have any contacts in the Las Vegas entertainment community; nor any background specific to ticket sales whatsoever.
“For Tix stockholders, the biggest risk resulting from a takeover of Tix by HSB would be that major Las Vegas shows and resorts lose confidence in Tix’s ability to handle their ticket sales and may simply stop supplying Tix with their tickets.”
Earlier this month HSB issued a statement in which it outlined “serious concerns with the company’s long-term underperformance”.
It said that Tix has been “plagued by repeated strategic errors, operational missteps, and stockholder disappointments” which has caused a “deterioration in Tix’s competitive position”.
It added: “HSB notes that the board has spent a significant amount of stockholder resources to spread misinformation about HSB and attempt to prevent HSB from exercising its most fundamental stockholder right to nominate directors in opposition to the company’s entrenched directors.
“This effort to disenfranchise stockholders, rather than make the necessary changes to increase stockholder value, clearly demonstrates the urgent need for change.
“HSB has validly nominated four highly qualified directors who possess the right mix of skills and relevant backgrounds to turnaround Tix and will not be derailed from allowing stockholders to decide the future direction of the company.”