{"id":7523,"date":"2022-12-19T09:02:04","date_gmt":"2022-12-19T15:02:04","guid":{"rendered":"https:\/\/1reason.com\/re\/star-equity-fund-issues-statement-on-inaction-of-servotronics-board\/7523\/"},"modified":"2022-12-20T03:02:04","modified_gmt":"2022-12-20T09:02:04","slug":"star-equity-fund-issues-statement-on-inaction-of-servotronics-board","status":"publish","type":"post","link":"https:\/\/1reason.com\/re\/star-equity-fund-issues-statement-on-inaction-of-servotronics-board\/7523\/","title":{"rendered":"Star Equity Fund Issues Statement on Inaction of Servotronics Board"},"content":{"rendered":"<div>, Nov.  14, 2022  (GLOBE NEWSWIRE) &#8212; Star Equity Fund, LP (\u201cStar Equity Fund\u201d, \u201cwe\u201d, \u201cour\u201d), a 5.2% shareholder of Servotronics, Inc. (NYSE American: SVT) (\u201cServotronics\u201d or \u201cthe Company\u201d), seeks to unlock shareholder value and improve corporate governance at its portfolio companies.          <\/p>\n<p align=\"justify\">On October 20<sup>th<\/sup>, we privately presented Servotronics\u2019 CEO and board of directors (the \u201cBoard\u201d) with a preliminary, non-binding indication of interest (the \u201cProposal\u201d) to explore a potential combination of Star Equity Holdings, Inc. (Nasdaq: STRR) (\u201cStar Equity\u201d) and Servotronics, subject to executing an NDA and further due diligence.<\/p>\n<p align=\"justify\"><strong>Star Equity\u2019s Proposal Would Benefit SVT Shareholders<\/strong><br \/>We believe Star Equity would be an excellent merger partner for Servotronics because the combination of the two companies would create significant value for both SVT and STRR shareholders through:<\/p>\n<ul type=\"disc\">\n<li style=\"text-align:justify\">the reduction of public company and corporate overhead costs,<\/li>\n<li style=\"text-align:justify\">increased operational focus and efficiency, and<\/li>\n<li style=\"text-align:justify\">ample opportunities for collaboration with Star Equity\u2019s experienced business leaders.<\/li>\n<\/ul>\n<p align=\"justify\">We also indicated we would be willing to pay a premium to SVT\u2019s October 19<sup>th<\/sup> closing stock price, subject to further due diligence.<\/p>\n<p align=\"justify\"><strong>Entrenched SVT Board Dismisses Star Equity\u2019s Proposal in Neglect of its Fiduciary Duty<\/strong><br \/>Although the Board acknowledged receipt of the Proposal, they did not respond for over ten days and would not return multiple phone calls placed to the Company. Then, on November 1<sup>st<\/sup>, Servotronics\u2019 CEO, William Farrell, issued a public letter to stakeholders vaguely describing his optimism for the future of Servotronics under his leadership. On November 2<sup>nd<\/sup>, the Board finally responded to our proposal after <strong>declining to engage in conversations with us<\/strong>, citing \u201csignificant risks\u201d and the need to \u201csafeguard shareholders\u2019 best interests\u201d \u2013 code for \u201cwe\u2019re not even going to talk with you to learn more about your proposal.\u201d<\/p>\n<p align=\"justify\">We strongly believe William Farrell\u2019s November 1<sup>st<\/sup> letter to stakeholders was in direct response to our Proposal and an attempt by him and the incumbent Board to garner support for themselves while denying SVT shareholders a potential value creating opportunity. We are appalled at the Board\u2019s rejection of our Proposal without genuinely engaging or even having a phone call with us, and we strongly question the incumbent directors\u2019 commitment to their fiduciary duty to shareholders.<\/p>\n<p align=\"justify\">Although we are pleased the Board made some changes earlier this year, we believe those changes were only made because of our activist campaign and resulting pressure, and it is now obvious that further change needs to occur to the Board\u2019s composition. It is clear to us the incumbent Board is still not properly aligned with shareholders and remains entrenched, placing their own self-interest above that of shareholders. We strongly urge the Board to reconsider their response to our Proposal \u2013 a proposal we believe would create significant value for SVT shareholders \u2013 and we remain ready to act in the best interest of all SVT shareholders in the future.<\/p>\n<p align=\"justify\"><strong>About Star Equity Fund, LP<\/strong><br \/>Star Equity Fund, LP is an investment fund managed by Star Equity Holdings, Inc. Star Equity Fund seeks to unlock shareholder value and improve corporate governance at its portfolio companies.<\/p>\n<p align=\"justify\"><strong>About Star Equity Holdings, Inc.<\/strong><br \/>Star Equity Holdings, Inc.(Nasdaq: STRR) is a diversified holding company with three divisions: Healthcare, Construction, and Investments.<\/p>\n<table align=\"center\" style=\"border-collapse: collapse;width:100%;border-collapse:collapse\">\n<tr>\n<td style=\"max-width:50%;width:50%;min-width:50%;text-align: justify;vertical-align: middle;vertical-align: bottom\"><strong>For more information contact:<\/strong><\/td>\n<td style=\"max-width:50%;width:50%;min-width:50%;text-align: justify;vertical-align: middle;vertical-align: bottom\" \/><\/tr>\n<tr>\n<td style=\"text-align: justify;vertical-align: middle;vertical-align: bottom\"><strong>Star Equity Fund, LP<\/strong><\/td>\n<td style=\"vertical-align: bottom\"><strong>The Equity Group<\/strong><\/td>\n<\/tr>\n<tr>\n<td style=\"text-align: justify;vertical-align: middle;vertical-align: bottom\">Jeffrey E. Eberwein<\/td>\n<td style=\"vertical-align: bottom\">Lena Cati<\/td>\n<\/tr>\n<tr>\n<td style=\"text-align: justify;vertical-align: middle;vertical-align: middle\">Portfolio Manager<\/td>\n<td style=\"vertical-align: middle\">Senior Vice President<\/td>\n<\/tr>\n<tr>\n<td style=\"text-align: justify;vertical-align: middle;vertical-align: bottom\">203-489-9501<\/td>\n<td style=\"vertical-align: bottom\">212-836-9611<\/td>\n<\/tr>\n<tr>\n<td style=\"text-align: justify;vertical-align: middle;vertical-align: bottom\"><a href=\"mailto:jeff.eberwein@starequity.com\" rel=\"nofollow noopener\" target=\"_blank\" title=\"jeff.eberwein@starequity.com\">jeff.eberwein@starequity.com<\/a><\/td>\n<td style=\"vertical-align: bottom\"><a href=\"mailto:lcati@equityny.com\" rel=\"nofollow noopener\" target=\"_blank\" title=\"\"><u>lcati@equityny.com<\/u><\/a><\/td>\n<\/tr>\n<\/table>\n<p align=\"justify\" style=\"text-align: justify\">\n<p><img src=\"data:image\/gif;base64,R0lGODlhAQABAAAAACH5BAEKAAEALAAAAAABAAEAAAICTAEAOw==\" class=\"lazyload\" data-src=\"https:\/\/ml.globenewswire.com\/media\/ZjY4ZTU3YjUtNmViOS00N2M4LWJkYTAtNTE2YzhlZGEzYjFiLTUwMDEwMTMwMQ==\/tiny\/Star-Equity-Fund-LP.png\"><\/div>\n","protected":false},"excerpt":{"rendered":"<div>\n<p align=\"center\">Entrenched SVT Board Dismisses Star Equity\u2019s Proposal in Neglect of its Fiduciary DutyIncumbents Not Focused on Maximizing Shareholder Value<\/p>\n<p align=\"justify\">OLD GREENWICH, Conn.<\/p>\n<\/div>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"","sticky":false,"template":"","format":"standard","meta":[],"categories":[11],"tags":[],"acf":[],"_links":{"self":[{"href":"https:\/\/1reason.com\/re\/wp-json\/wp\/v2\/posts\/7523"}],"collection":[{"href":"https:\/\/1reason.com\/re\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/1reason.com\/re\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/1reason.com\/re\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/1reason.com\/re\/wp-json\/wp\/v2\/comments?post=7523"}],"version-history":[{"count":1,"href":"https:\/\/1reason.com\/re\/wp-json\/wp\/v2\/posts\/7523\/revisions"}],"predecessor-version":[{"id":7571,"href":"https:\/\/1reason.com\/re\/wp-json\/wp\/v2\/posts\/7523\/revisions\/7571"}],"wp:attachment":[{"href":"https:\/\/1reason.com\/re\/wp-json\/wp\/v2\/media?parent=7523"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/1reason.com\/re\/wp-json\/wp\/v2\/categories?post=7523"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/1reason.com\/re\/wp-json\/wp\/v2\/tags?post=7523"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}