Activist Investor Pressures Range to Change Board, Mgmt Structure

What constitutes an “activist investor” and what constitutes a “corporate raider?” Depends on whom you ask. We address the semantics issue below in more detail. The reason we raise it is because of some big, breaking news: Activist investor SailingStone Capital Partners is forcing Range Resources to do some things Range may not prefer to do. Nearly two years ago, in August 2016, MDN told you that investment firm SailingStone Capital had purchased 11% of Range Resources stock (see SailingStone Capital Buys 11% of Range Stock, Gets Board Seat). They got a board seat out of their investment, and the right to nudge Range in a certain direction, to some degree. Although we were suspicious, at the time it appeared SailingStone was more of a partner assisting Range rather than what we call a corporate raider. SailingStone now owns 17% of Range’s outstanding shares, and they are throwing their weight around. In an announcement made yesterday, we learn that SailingStone has pressured Range into granting them two more seats on the board–for a total of three (out of ten). Is it fair that SailingStone controls 30% of the board but only owns 17% of the company? SailingStone has also forced Range CEO Jeff Ventura to relinquish his title (and power) as Chairman of the Board, appointing a new “independent” Chairman. SailingStone is also forcing Range to hire a new outsider as executive VP, to “supplement and strengthen the management team.” Is SailingStone “helping” Range make changes that Range truly needs to make to benefit shareholders? Or is there something more nefarious going on?…

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