NEW YORK, June 24, 2008 (PRIME NEWSWIRE) -- FrontFour Capital Group LLC sent a letter to Fisher Communications, Inc. (Nasdaq:FSCI) on June 24, 2008. David A. Lorber, Portfolio Manager, stated the following:
"We are extremely disappointed by the Board of Directors' apparent unwillingness to engage in discussions with a potential buyer. Given the Board and management's failure to create shareholder value over the past two and a half years, the Board's rejection of an unsolicited indication of interest at a 35% to 40% premium, announced June 23, 2008, has left us no choice but to publicly express our discontent.
"This letter should come as no surprise to the Board and management of Fisher. We have privately expressed our concern about Fisher's operating performance, dilutive acquisitions, discounted public market valuation, and archaic corporate governance policies, which promote entrenchment.
"New management was brought in over two and a half years ago to pursue a turnaround that has not materialized. As a result, shareholders have suffered a 30% loss while approximately $100 million was spent on acquisitions that have added limited to no value. Management has stated that the television broadcast assets should be operating at a 40% broadcast cash flow margin, yet in 2007, there was no meaningful improvement versus 2006, and margins remain below 30%. As depicted in management's own presentation to shareholders at the 2008 annual meeting, broadcast margins continue to be meaningfully below peer levels.
"It appears that management has been given more than sufficient time to improve shareholder value, but has been unsuccessful in its efforts. Accordingly, we believe that this Board should immediately announce the retention of an investment advisor with a clear mandate to engage all strategic and financial buyers in a transaction that would maximize shareholder value. Additionally, this Board should affirmatively announce a permanent moratorium on all acquisitions. Given the current trading level of Fisher's stock, we believe that any further acquisitions would be highly dilutive and inconsistent with the Board's fiduciary duty to shareholders. Should discussions with potential buyers not result in a transaction, the Board should focus on amending or removing provisions in the capital structure to allow for a significant return of cash to shareholders.
"We welcome further discussions with the Board or its representatives. In the meantime, we will work with our advisors to determine potential courses of action, which may include calling a special meeting of stockholders or running a proxy contest at the 2009 annual meeting."
About FrontFour
FrontFour Capital Group LLC is a privately owned hedge fund management company based in New York, New York.