Disgruntled Investors Demand Resignation Of Synacor’s Chairman

JEC Capital Partners and Ratio Capital Partners, shareholders that together own 9.8% of Synacor’s common stock, continue to stir it up at the troubled Web portal and TV Everywhere specialist, this time demanding the resignation of Synacor chairman Jordon Levy.

Those investors have previously urged Synacor’s board to halt its search for a replacement for current CEO Ron Frankel, and to find a buyer for the company. Its latest demands, issued Thursday in an open letter to the Synacor board, also implores the board to add two new directors.

The letter to the Synacor board on Thursday in response to a stockholder rights plan, typically  referred to as a “poison pill,” adopted on July 15 that, while would not prevent a takeover or sale of the company, would make it more expensive for anyone seeking to acquire Synacor without first negotiating terms with the board.

“If a person or group acquires 10% or more of Synacor's outstanding common stock, each right will entitle its holder (other than such person or members of such group) to purchase for the Right's then-current exercise price a number of Synacor common shares having a market value of twice such price,” Synacor announced.

“While we are always willing to engage in constructive dialogue with our investors and regularly consider all methods to maximize long-term shareholder value, we have concerns regarding the motivations and actions of JEC Capital Partners,” Synacor ‘s Levy said, in a statement when the company announced its shareholder rights plan. “JEC is affiliated with Peter Heiland, who is both a Managing Director of JEC and the Interim CEO of a company with similar customers to Synacor and the capability to become a potential acquirer, and as such may have motives that are not aligned with other shareholders. In order to guard against potential attempts to seize control of the Company without paying an appropriate premium, we are taking this action today."

JEC Capital and Ratio Capital held that Levy has led the board “into making decisions that are a mockery of proper corporate governance,” and reiterated their belief that value in Synacor “can be unlocked through a third-party strategic transaction.”

They are calling for the board to call a special meeting that allows shareholders to vote on whether the board should seek the resignation or removal of Levy, an expansion of the board’s size from six to seven members, and the addition of two new board members who are recommended by shareholders.

Before it adopted the new shareholder rights plan, Synacor said that, while it continues to “embrace an open dialogue with shareholders, the company will intends to pursue a growth plan aimed at keeping the company autonomous.