Ally Financial taps J.P. Morgan to advise on activist fight

Thu Jan 21, 2016 3:47pm EST
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By Michael Flaherty

(Reuters) - Ally Financial Inc (ALLY.N: Quote) has hired J.P. Morgan (JPM.N: Quote) to advise the largest U.S. auto lender as it fends off activist hedge fund Lion Point Capital's campaign for changes at the company, people familiar with the matter said on Thursday.

Lion Point, co-founded in 2014 by former portfolio managers from Elliott Management and Perry Capital, asked Ally to extend its director nomination deadline past Jan. 4 to consider two of its candidates.

Ally did not extend the deadline but said it would consider the firm's candidates.

The company also rebuffed the hedge fund's request to have the board consider forming, under certain conditions, a committee to seek strategic alternatives, including the possible sale of the company.

"Our fundamental disagreement is with Lion Point's clear agenda to force a sale of Ally," Ally Chairman Franklin Hobbs said in a Jan. 4 statement.

If the two sides can not come to some kind of agreement before Ally's annual meeting, Lion Point could launch a proxy contest to have its directors added to the board.

Lion Point's less than 1 percent holding in the $9 billion lender mark's the firm's first public campaign to push change at a company.

Ally, J.P. Morgan and Lion Point declined to comment.   Continued...

An Ally Financial sign is seen on a building in Charlotte, North Carolina May 1, 2012. . REUTERS/Chris Keane