ATCHISON, KANSAS, U.S. — MGP Ingredients, Inc. (MGPI) said on May 29 its board of directors has authorized a review of strategic alternatives. The move comes less than a week after MGPI cut short its annual meeting of shareholders due to a lack of quorum of preferred stock shareholders.
The board of directors has established a special committee of six independent directors to conduct the review and has retained BMO Capital Markets Corp. as its financial adviser.
“The company has not set a definitive timetable for completion of its evaluation, and there can be no assurances that the process will result in any transaction being announced or completed,” MGPI said. “The company does not plan to disclose or comment on developments regarding the strategic review process until further disclosure is deemed appropriate.”
MGPI said initiating a review of strategic alternatives will allow the company “to explore options that may accelerate the realization of value for the benefit of its stockholders.”
“While alternatives are reviewed, the company remains focused on executing on its operational plan to realize the long-term value of its assets,” MGPI said.
According to a May 24 filing with the Securities and Exchange Commission, two members of the board, Karen Seaberg and Cloud Cray Jr., refused to attend the May 23 annual meeting, citing a “growing concern with the lack of profitable growth, deterioration in the corporate culture, efforts to sell certain parts of the company’s business, efforts to amend the bylaws that would limit accountability to shareholders and increase the power of the chief executive officer, and the level of compensation paid to the chairman of the board of directors and the chief executive officer (CEO) of the company.”
As a result, Seaberg and Cray (along with Laidacker M. Seaberg, Cray Family Management LLC and Cray MGP Holdings LP) said in the filing they actively are seeking to change the board, as well as influence the board and officers “to improve business and financial performance, ensure accountability to shareholders and restore a corporate culture that is positive, is empowering and reinforces the company’s goals.”
Specifically, Seaberg and Cray said they are seeking the removal of Tim Newkirk as CEO and requesting his resignation as a director, as well as the resignation of any other directors of the board who are not supportive of the their goals and related actions.