Activist Is Said Likely to Lose Fight for Board Seats at Sina
Activist Is Said Likely to Lose Fight for Board Seats at Sina
(Bloomberg) -- Chinese internet company Sina Corp. is likely to have fended off activist investor Aristeia Capital’s attempt to win seats on its board based on early voting returns from shareholders, according to people familiar with the matter.
In a rare instance of activism at a major Chinese company, Aristeia fought to get two nominees elected to the board of the Beijing-based company, which controls Twitter-like service Weibo Corp. While official polling for the vote closed last night, investors can still hand deliver their ballot until the board meeting in Hong Kong on Nov. 3, the people said, asking not to be identified as the details aren’t public. There’s a small chance results may change as more votes come in, they said.
A representative for Sina declined to comment.
Aristeia said in a statement that based on the latest independent report, it believes the vote is very close. It said Aristeia’s case for change was supported by a majority of independent, non-Sina-insider shareholders by a large margin.
Chief Executive Officer Charles Chao, who’s led the company since 2013, owns more than 12 percent of Sina.
The vote marks a setback for Aristeia, which started a proxy war in September when it took a stake in Sina and questioned the company’s ability to deliver on shareholder value. It urged changes to fix an insular culture and address a $6 billion discount to net assets, while taking aim Chao. Sina responded by telling shareholders to vote against Aristeia’s slate, arguing they lack understanding of or experience in the Chinese market.
Prominent shareholder advisory firms backed Aristeia’s campaign last month. Institutional Shareholder Services Inc. urged shareholders to vote for Thomas Manning, one of Aristeia’s two nominees, while Glass Lewis & Co. recommended green-lighting both Manning and Brett Krause. Both the advisory firms suggested investors elect existing Sina board member Zhang Yichen, who’s been a director at the company for more than a decade and is chairman at Citic Capital Holdings Ltd.
Sina shares have doubled this year, tracking a 136 percent gain for Weibo, as users of the microblogging site surged to 340 million and its market value overtook Twitter Inc. Much of the Chinese company’s success in the past couple of years has resulted from its willingness to chase users other social media services ignore, such as those in rural and regional provinces.
To contact the reporters on this story: Scott Deveau in New York at sdeveau2@bloomberg.net, Edwin Chan in Hong Kong at echan273@bloomberg.net.
To contact the editors responsible for this story: Robert Fenner at rfenner@bloomberg.net, Elizabeth Fournier at efournier5@bloomberg.net, Edwin Chan
©2017 Bloomberg L.P.