Orbotech Reached Agreement with Ion
2 July, 2014
Board's wars: The new agreement between Orbotech and ION, marks a change in policy: maybe to avoid fierce control struggle over the company
The new agreement between Orbotech and ION, marks a change in policy: maybe to avoid fierce control struggle over the company
Orbotech Ltd. fron Yavne, Israel and Ion Asset Management Ltd. announced a mutual agreement under which Orbotech will call an Extraordinary General Meeting of shareholders not later than August 15, 2014 to allow its shareholders to consider a proposal to declassify the Orbotech Board of Directors. The Orbotech Board and Ion have each agreed to support this declassification proposal.
Orbotech has also agreed to review its capital allocation policy no later than August 24, 2014, including dividend payments and share repurchases.
They have also agreed that two new individuals will be identified and selected jointly to be appointed to the Orbotech Board of Directors. Ion has agreed to a standstill with respect to certain matters until prior to Orbotech’s 2015 Annual General Meeting of shareholders.
Ion Asset Management holds approximately 6.1% of Orbotech’s ordinary shares. The firm sent a letter to Orbotech’s board in 9th June and demanded the nomination of four new board members to stand against the three incumbent Directors, to remove the staggered board structure and move to a declassified structure, and to review the capital structure of the Company, dividend, and share repurchase policy.
Orbotech reaction was to reject those demands. But the new agreement marks a change in its policy, maybe to avoid fierce control struggle over the company. Yochai Richter, Active Chairman of the Orbotech Board of Directors, said: “We believe this agreement will allow us to focus on improving our already strong position in the marketplace.”