NEW YORK, March 30, 2016 /PRNewswire/ -- Wynnefield
Capital, Inc. and its affiliates (collectively, "Wynnefield
Capital"), shareholders of Checkpoint System, Inc. (NYSE: CKP)
("Checkpoint" or the "Company"), with an approximate 2.1% ownership
interest (as of March 30, 2016),
today stated their strong opposition to the 'take under' sale of
Checkpoint to CCL Industries (TSE: CCL.B).
Nelson Obus, President, CIO and
Founder of Wynnefield Capital, said, "The deal price to which
Checkpoint's Board has agreed is utterly inadequate and an affront
to the Company's shareholders. Checkpoint is a company with a
promising future – strong business fundamentals, including a
blue-chip customer base, attractive recurring revenue, robust free
cash flow and significant RFID opportunity growth.
Checkpoint's Board has chosen to forego the Company's intrinsic
value and accepted a take-under buyout based on a discounted EBITDA
multiple and at a price that is 25% below where the stock traded
just one year ago. Wynnefield Capital joins like-minded
shareholders in urging Checkpoint shareholders to reject this
value-destroying transaction."
Poor Corporate Governance
Wynnefield Capital is deeply concerned with the Board's
longstanding, inferior corporate governance practices. These
shareholder unfriendly practices enabled the shocking decision to
sell the Company at a deep discount, depriving shareholders of long
term value and likely simultaneously rewarding directors and
management with undeserved change in control payouts.
Wynnefield Capital reminds Checkpoint shareholders and members
of the investment community that just 10 months ago, Institutional
Shareholder Services (ISS), one of the leading proxy advisory
firms, analyzed the Company's governance practices and awarded
Checkpoint a risk rating of '10,' the lowest possible rating that
can be awarded to any company.
At the time, ISS urged shareholders to vote against an advisory
vote on executive compensation, citing the lack of alignment of pay
with stock price performance and use of above-median benchmarking
for executive compensation. Checkpoint shareholders heeded
ISS' guidance, overwhelmingly voting against the Company's
compensation plan and sending an unambiguous message to
Board. Yet, the Company once again ignored shareholders'
wishes and instead of implementing changes, the Board rewarded the
head of Checkpoint's compensation committee by promoting him to
Chairman.
This is the track record of a Board that should not be trusted
as fiduciaries and the disastrous deal with CCL is further evidence
of that. Therefore, shareholders should be given the opportunity to
vote for the nominees who they feel most properly represent their
best interests.
Wynnefield Capital takes note of North Star Partner's stated
intention to nominate a slate of director nominees at Checkpoint's
2016 Annual Meeting of shareholders. Should North Star
Partners, one of Checkpoint's largest shareholders, file the
requisite proxy statement and accompanying materials, Wynnefield
Capital will closely analyze the qualifications of its nominees and
strongly consider supporting their candidacies.
About Wynnefield Capital, Inc.
Established in 1982, Wynnefield Capital, Inc. is a value
investor specializing in U.S. small cap situations that have
company or industry-specific catalysts.
Contact:
Mark Semer or
Daniel Yunger
Kekst
mark.semer@kekst.com / daniel.yunger@kekst.com
212.521.4800
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SOURCE Wynnefield Capital, Inc.