May 24, 2012 / 7:25 PM / 5 years ago

QLT postpones AGM over last-minute proxy campaign

(Reuters) - QLT Inc QLT.TO postponed its annual meeting on Thursday, hours before it was scheduled to begin, after a major shareholder disclosed a proxy campaign to take control of the Canadian pharmaceutical company’s board.

The eye drug developer said it delayed the meeting to June 4 to allow time for shareholders to “properly consider their decision” on a dissident slate of board nominees.

On Tuesday, Danish fund NB Public Equity Komplementar ApS said in a filing with the U.S. Securities and Exchange Commission (SEC) that it would nominate up to six new board members at the meeting. The company’s own slate has seven candidates.

NB Public Equity has a 15.2 percent stake in QLT, and ranks as its second-biggest shareholder, according to Thomson Reuters data. The fund, which invests mostly in biopharmaceutical companies, said in the filing that it thought a change was needed on the board, without revealing its reasoning.

Separately on Thursday, hedge fund Axial Capital Management, QLT’s biggest shareholder with an 18.1 percent stake, also disclosed some frustration.

In its own SEC filing, Axial said it had been in touch with the company and others about its “increasing unhappiness” with QLT’s business plan and dividend policy. QLT does not pay a quarterly dividend. Reached before the filing was public, Axial said it would not comment on the dispute.

Earlier this month, QLT reported a wider quarterly loss as research and development costs rose 30 percent to $12.6 million.

PROXY SURPRISE

In an open letter released on Wednesday, QLT described the proxy campaign as disruptive and potentially threatening to its clinical development program.

“QLT management has spoken to a number of shareholders who are concerned that NB Public Equity has not disclosed its plans for the company,” QLT said in a statement.

The company also said its proxy administrator had flagged discrepancies in connection with proxies voted by the dissident shareholders but offered no details.

“The company is making every effort to maintain the integrity of the proxy voting process and to ensure that no shareholders are disenfranchised,” it said.

Kingstown Capital Management, which together with various affiliated entities holds a 5.5 percent stake, filed with the SEC on Wednesday to say it had granted NB Public Equity a revocable proxy to vote for the dissident slate.

Shares of QLT were closed up 3.0 percent at C$7.45 on the Toronto Stock Exchange on Thursday.

Reporting by Allison Martell in Toronto and Sakthi Prasad in Bangalore; Editing by Mike Nesbit and Tim Dobbyn

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