Proxy adviser Glass Lewis backs SilverBow nominees in Kimmeridge board spat (updated)

SilverBow Resources

09/05/2024 17:45

(Adds report content and background in paragraphs 4-11, adds
share price in paragraph 6)
    By David French
       May 9 (Reuters) - Proxy adviser Glass Lewis on Thursday
recommended shareholders of SilverBow Resources  SBOW.N  vote
for the company's board nominees, and withhold support for
directors backed by activist investment firm Kimmeridge Energy
Management.
    Kimmeridge, the largest shareholder in SilverBow, is aiming
to seat three new independent directors at the oil and gas
producer's annual shareholder meeting on May 21, saying the
company needs to revamp its governance and improve performance.
    However, Glass Lewis said it recommended backing the three
director nominees submitted by SilverBow, and shareholders
should withhold votes for the Kimmeridge-supported nominees,
according to a copy of its report seen by Reuters.
    "While we acknowledge Kimmeridge's industry credibility, we
do not believe there exists sufficiently compelling cause to
endorse the dissident nominees at this time," Glass Lewis wrote
in the report.
    The proxy adviser said SilverBow's improved operating
performance in recent months was an important consideration,
including how SilverBow has managed the assets it bought from
Chesapeake Energy  CHK.O  in November. 
    Shares in SilverBow were 0.3% lower in midday trading.
    SilverBow and Kimmeridge did not immediately respond to
comment requests.
    The Glass Lewis report is the latest twist in the ongoing
saga between SilverBow and Kimmeridge, which has also included
public offers by the investment firm to merge SilverBow with its
own private energy operator in the Eagle Ford basin of south
Texas.
    That offer was withdrawn by Kimmeridge in mid-April, citing
a lack of credible engagement in negotiations from SilverBow.
    Glass Lewis, in its Thursday report, said from available
materials it seemed that SilverBow made "reasonable effort" to
engage in exploring options, and its engagement over
Kimmeridge's merger offer was more determined by concerns over
valuation, shareholder dilution and other appropriate factors.
    However, the proxy adviser chided SilverBow for its
continued use of a poison pill - a type of anti-takeover defense
which stops parties from being able to accumulate significant
amounts of shares - calling it "fundamentally regressive from a
corporate governance standpoint".
    

 (Reporting by David French in New York; Editing by Chizu
Nomiyama and Josie Kao)
 ((davidj.french@thomsonreuters.com;))