The saga involving Synacor and two dissident shareholders continued Wednesday, with Synacor holding that the demands of JEC Capital Partners and Ratio Capital were deemed “inappropriate” and lacked the best interest of all Synacor stockholders.
Synacor’s response comes after JEC Capital and Ratio Capital, which together hold about a 10% stake in the Buffalo, N.Y.-based maker of TV Everywhere technologies and customized Web portals, have been calling for the resignation of Synacor chairman Jordon Levy while also urging the Synacor board to seek a sale of the company.
In Synacor’s response issued on Wednesday (October 1), the company said its board of directors “attempted to engage in cooperative dialogue” with JEC Capital and Ratio Capital and ultimately offered them board representation.
“However, the Board's numerous good faith actions were each met with excessive and inappropriate demands by JEC and Ratio, lacking the best interest of all Synacor stockholders, and abruptly JEC and Ratio have abandoned discussions,” Synacor said.
Synacor added that its board “continues to have concerns regarding the motivations and actions of JEC Capital Partners,” noting its affiliation with Peter Heiland, who is a managing director at JEC and currently serves as the interim CEO of Piksel, a company with roots to once-troubled online video publishing firm KIT Digital that relaunched in August with a new modular platform targeted to content owners, aggregators and distributors.
Synacor didn’t mention Piksel by name, but noted that the company currently affiliated with Heiland has similar customers to Synacor “and may have the intent to become a potential acquirer, and as such may have motives that are not aligned with other stockholders.”
“It is disappointing that Ratio and JEC seem intent on continuing to wage their public campaign of insults and attacks in an attempt to force the Company to capitulate to their short term agenda,” Synacor said. “The Board has asked Synacor's management team to continue their focus on driving the Company's growth agenda, streamlining operations, building best-in-class products, working with customers to generate sustainable shareholder value, and to avoid the distraction of filings made by a minority group of investors that fail to benefit the full population of Synacor stockholders.”
Meanwhile, Synacor, under new CEO Himesh Bhise, has been moving ahead with a plan to streamline and return the company to profitability and growth. On Tuesday (September 30), Synacor announced that it would cut about 70 jobs, or 20% of its workforce, while reaffirming guidance for the third quarter and for the full fiscal year. The company also said it would discuss the financial impact of Tuesday’s announcement and its revised strategic plan when Synacor reports third quarter results on Thursday, Oct. 30.
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