Stelmar Shipping was stelios' first venture which he created in 1992 at the age of 25. Stelmar was listed on the New York Stock Exchange in 2001 at $12 per share and was sold to OSG, another listed shipping company, at $48 per share or about $1.3bn including debt in January 2005. The transaction which was a great victory for shareholder activism championed by Stelios came after a long battle between Stelios as a shareholder and the management team. For more details on that please read below. STELMAR SHIPPING LTD. ACQUIRED BY OVERSEAS SHIPHOLDING GROUP INC. (OSG) For more information about OSG we encourage you to visit our company's website: www.osg.com A court injunction freezes the shares owned by Stelmar CEO,
Peter Goodfellow A Greek judge has ordered that the share options owned by the CEO of Stelmar, Peter Goodfellow in Stelmar Shipping, worth more than $500,000, should be frozen, pending an investigation into his activities, despite the sale of the company later today. Judge Maria Gragiadaki, of the court of Piraeus, Greece issued the interim judgment on the 19th of January 2005 following an injunction filed by Mr Demetris Thomas, the claimant against Mr Goodfellow. Mr Thomas is a supplier to Stelmar shipping and an apparent middleman between Stelmar and Skaramanga shipyard that repaired the Stelmar vessel Keymar. A photocopy of the last page of the judgement in Greek is posted at www.easy.com under Stelmar (to view... click HERE). For clarity Mr Thomas has a claim against Mr Goodfellow and others but not Stelmar as a company. "First, I see no reason why this should affect the sale of the company to OSG and I have already voted for it," said Stelios, serial entrepreneur, easyGroup chairman and founder of Stelmar. "Although we are a long way from establishing the true facts in the murky case of the $30m repair of the Keymar, my allegations which the rest of the Stelmar board dismissed are proving to be true. The “investigation” announced by the non-executives using the conflicted law firm of Norton Rose, appears to have been a mere whitewash. I have always insisted in keeping the highest standards of corporate governance for all the companies that I have created and in which I remain a shareholder. I am very disappointed to see how low the standards have fallen in Stelmar since I left the board some three years ago. Now that some facts are emerging and since a court judgment has been issued, the directors should do the honourable thing and refrain from taking any cash or shares from the sale of the company until matters are finally decided by the Greek courts. Nobody should be allowed to profit from their misdeeds just because the company is changing ownership. I told the non-executives about this unfolding scandal many times in the past and in writing. They chose to ignore my calls for the dismissal of Mr Goodfellow thus preserving his rights to a hefty change of control payment. I just wanted to clean up the management of the company in which I was a shareholder! This is what shareholder activism is all about! Stelios, serial entrepreneur, easyGroup chairman and founder of Stelmar has long had issue with the management and board of Stelmar which first became public in May 2004 when the Stelmar board rejected outright a bid by OMI to acquire Stelmar. Stelios, whose family remained the largest shareholder in Stelmar, has accused the Stelmar board of various points of mis-management and irregular activity which are clearly chronicled on the easyGroup portal www.easy.com by clicking on the Stelmar link. Particularly, once Stelmar shareholders had voted against the proposed merger between Stelmar and Fortress Investment Group and insisted on a clear, transparent auction process, Stelios insisted that the discredited Peter Goodfellow and his CFO be removed from office. The non-executives on the Stelmar board did not comply with this demand, and it is alleged that they did this in order to preserve rights to change of control payments as detailed in the proxy statement. Mr Goodfellow should have been fired immediately after the shareholder vote. Peter Goodfellow was, however, excluded from the auction process which will result in the purchase of Stelmar by OSG at $48 a share. This merger is being supported by Stelios and will be put to shareholder vote in New York today, 20 January. Stelios plans to vote FOR the Stelmar/OSG merger - a great day for shareholder activism as our efforts forced the Board to find a fair deal posted: Jan 5, 2005 The following message was written by Stelios: As I said on December 13th when the Stelmar OSG merger was announced, I have been following the shipping markets and the performance of the share price of the peer group of Stelmar in order to decide whether to accept or reject the $48 per share offer in cash at the imminent shareholder vote on January 20th. After careful examination of the following facts, I am currently minded to vote FOR the merger:
I am very disappointed that the directors made it so difficult to achieve the only outcome which was logical from the first day that my family and I announced the OMI agreement back in May 2004. A lot of money and energy has been wasted in the interim by the company and the shareholders. I hope that the non executive directors will also waste no more time in investigating the allegations around the Keymar repair. I believe that the appointment of the law firm Norton Rose did not help in that direction as, in my view, they are conflicted since they are also acting for management on the related Keymar insurance claim case. I am really disappointed by what I believe is a lack of judgment on the part of the non-execs and I reserve all my rights as a shareholder in that respect. Wishing to end on a positive note, Stelmar, now valued at almost $850million was my first venture which I started when I was 25 years old, some 12 years ago,, and in the last year it has been my best performing investment. I would like to thank the vast majority of staff who worked diligently to make this a success. The time has come for me to move on and focus into what I consider to be my core competence, which is “branding”. With the success of easyJet I have built a leading pan-European brand which I am now busy extending in 12 different sectors. My love of the sea will continue in the form of easyCruise.com, with the first ship completing its refit soon in Singapore and being expected to start sailing in the Mediterranean in May 2005. My vision is to make cruising holidays exciting and accessible for the young! Once a ship owner, always a ship owner!
Stelios comments on OSG offer for
Stelmar This is the vindication of my efforts over the last month during which the value of our company has increased by some $170 million above the level at which the directors were telling Stelmar shareholders to sell to Fortress! I am glad the non executives on the Stelmar board learned from their mistakes and excluded the management from the new process. I elected not to be part of the committee of the board conducting this new process and I have not expressly approved this deal. I was, however, consulted by Stelmar's investment bankers over the weekend and unlike the last time, I have no misgivings about the process this time. Like all Stelmar shareholders I am delighted to have a new floor to our share price and I will be evaluating the deal in relation to market conditions closer to the vote date. I would like to use this opportunity to thank the middle management and staff of Stelmar for all their hard work over the last 12 years. I think the fact that their leadership failed them does not detract from the great job they have done taking Stelmar from the dream of a 25 year old to a company worth $843 million in 12 years.
Stelios Stelios comments on Stelmar 'merger vote massacre' Certified vote count shows approximately three-fourths of shares voting, not in favor of Stelmar - Fortress transaction. New York, November 17, 2004 - Stelios Haji-Ioannou, founder of Stelmar Shipping Ltd (NYSE:SJH), and Chairman of EasyGroup (which includes EasyJet, Plc) (LSE: EZJ), today releases the following statement: Once again, I want to thank my fellow Stelmar shareholders. This
is a landslide victory for shareholder activism. I believe that this is the first
time in US financial history that a transaction recommended by a Board was rejected
without a competing offer on the table. And to add insult to injury, the offer
price was increased on the day prior to the shareholder vote in the Stelmar -
Fortress proposed transaction and it was still overwhelmingly rejected.
With about 75% of shares voted ignoring the Board's recommendation, the entire
Board should consider this as a clear vote of no confidence. Stelmar shareholders
have made it crystal clear that they expect the Board to implement a process that
maximizes value for all shareholders. In that regard, I offered the independent
Directors an honorable way of keeping some continuity on the Board while implementing
a new, robust and transparent auction on an expedited time schedule. IVS Associates, the independent inspectors of elections, certified the following voting results with respect to the Fortress transaction: of the shares outstanding, 45.5% (7,991,026 shares) voted "against", 3.0% (530,900 shares) "abstained", and just 16.9 % (2,970,644 shares) voted "for" the Fortress transaction. Analysts and Institutions Contacts: Media Contacts: Stelios is pleased that Stelmar shareholders
overwhelmingly reject Fortress transaction at the November 16, 2004 Stelmar Special
Meeting of shareholders NEW YORK--(BUSINESS WIRE)--Nov. 16, 2004--Stelios Haji-Ioannou,
founder of Stelmar Shipping Ltd (NYSE:SJH), and Chairman of EasyGroup (which includes
EasyJet, Plc) (LSE: EZJ), and Polys Haji-Ioannou announced today that the independent
inspectors of election said that based on preliminary results, Stelmar shareholders
did not approve the Stelios commented: "I appreciate the active participation of the Stelmar shareholders
throughout this process. With the preliminary results showing that less than 20
percent of the shareholders supported the Board's actions, the mandate is clear
- the Stelmar Board needs to change "Subsequent to the shareholder meeting, I met with the independent Directors and reiterated the terms under which I will rejoin the Board, as articulated in my press release this morning, and am awaiting a response from them. In any event, absent cooperation from the Board, I am working on contingent plans to ensure that all Stelmar shareholders receive maximum value on an expedited basis." Nixon Peabody is acting as legal counsel. Stelios Haji-Ioannou prepared to join the Stelmar
Board of Directors as Interim Chairman New York, November 16, 2004 - Stelios Haji-Ioannou, founder of Stelmar Shipping Ltd (NYSE:SJH), and Chairman of EasyGroup (which includes EasyJet, Plc) (LSE: EZJ), today announced – before entering the Stelmar meeting – that he has already informed the four Stelmar independent Directors that if the Fortress transaction is rejected and his call for the resignation for the Chairman, CEO, CFO is heeded, he is then prepared to join the Board of Directors as interim Chairman to oversee a new auction process. As he has always done with his public companies in the past, he will not draw a salary or expenses. Stelios Haji-Ioannou said, “I am willing to work with the independent Directors towards creating a robust and transparent auction that fully maximizes value for all Stelmar shareholders. I believe that Stelmar is a strong Company with many valuable assets and I am willing to invest my time to act as a shareholders’ representative to ensure that the best possible transaction is achieved.” Moreover, Stelios urged the Board to avoid any further “nickel and diming” with Fortress, to resist the urge to adjourn the special meeting in order to minimize the break-up fee with Fortress, and assuming that the transaction is rejected, to release all prior bidders from their standstill agreements. IMPORTANT INFORMATION SECURITY HOLDERS ARE ADVISED TO READ THE PROXY STATEMENT AND OTHER PROXY MATERIALS BECAUSE THEY CONTAIN IMPORTANT INFORMATION. THE PROXY STATEMENT AND THE AFOREMENTIONED LETTER ARE AVAILABLE
FOR FREE AT WWW.SEC.GOV, ALONG WITH ANY OTHER RELEVANT DOCUMENTS. YOU MAY ALSO
OBTAIN A FREE COPY OF THE PROXY STATEMENT OR THE LETTER BY CONTACTING MACKENZIE
PARTNERS AT (212) 929-5500, OR TOLL-FREE AT (800) 322-2885, OR BY SENDING AN EMAIL
TO proxy@mackenziepartners.com. Stelshi and Stelphi have retained MacKenzie Partners, Inc., a proxy solicitation firm, in order to assist it in communicating with Stelmar shareholders in connection with Stelmar’s November 16, 2004 special meeting of shareholders to vote on the proposed merger with Fortress. Stelshi and Stelphi urge all Stelmar shareholders to protect the value of their investment by voting against Fortress’ efforts to buy Stelmar at a discounted price. Stelios and Polys Haji-Ioannou Comment on Stelmar Announcement posted: Nov 15, 2004 Stelios Haji-Ioannou, founder of Stelmar Shipping Ltd (NYSE:SJH), and Chairman of EasyGroup (which includes EasyJet, Plc) (LSE: EZJ), and Polys Haji-Ioannou issued the following comments: We will not accept $40 for our shares and neither should any other
Stelmar shareholder. We know this Company is worth more and so do others. Actions
speak louder than words and just last week we were We think the Directors who lead this charade with Fortress (Hartley,
Goodfellow and Molaris) should resign, if they lose the vote on Tuesday, and the
outside Directors should call for new elections of Directors within a month. The
Board should stop giving Fortress sweetheart treatment and open up the bidding This latest pathetic attempt by the Stelmar Board to allow Fortress
to steal the full value of the Company has convinced us that they are acting in
their own competing self-interest. We believe the disclosure in Stelmar's proxy
about the examples of executive compensation given to them by Fortress is not
complete Do not believe the directors of Stelmar. These people told you
emphatically only last Thursday that Whilst not the only measure to judge this offer, we will focus on the one that is favored by management. Since May 14, Stelmar's peer group(1) has appreciated almost 70% vs the 60% that the Fortress offer represents. In other words, Fortress is stealing Stelmar without even paying for a control premium. Stelios and Polys Haji-Ioannou noted that they intend to vote AGAINST the Fortress transaction and urge their fellow shareholders to do the same. For information about how to vote the GREEN proxy card, Stelmar shareholders can contact Stelios and Polys Haji-Ioannou's proxy solicitor, MacKenzie Partners, Inc., by calling (212) 929-5500 or toll free at (800) 322-2885. Stelmar shareholders are reminded that if they do not receive a proxy statement and GREEN proxy card from Stelios and Polys Haji-Ioannou, they may contact MacKenzie Partners to request these materials or they may vote AGAINST proposal 1 - the Fortress transaction - on the proxy card provided by Stelmar in its proxy solicitation materials that were sent to shareholders in October, which will have the same effect. IMPORTANT INFORMATION THE PROXY STATEMENT AND THE AFOREMENTIONED LETTER ARE AVAILABLE FOR FREE AT WWW.SEC.GOV, ALONG WITH ANY OTHER RELEVANT DOCUMENTS. YOU MAY ALSO OBTAIN A FREE COPY OF THE PROXY STATEMENT OR THE LETTER BY CONTACTING MACKENZIE PARTNERS AT (212) 929-5500, OR TOLL-FREE AT (800) 322-2885, OR BY SENDING AN EMAIL TO proxy@mackenziepartners.com. INFORMATION REGARDING THE NAMES OF PERSONS WHO MAY BE DEEMED TO BE PARTICIPANTS IN THIS SOLICITATION OF STELMAR'S SHAREHOLDERS, AND THEIR DIRECT AND INDIRECT INTERESTS, BY SECURITY HOLDINGS OR OTHERWISE, IS AVAILABLE IN THE PARTICIPANTS' SCHEDULES 13D FILED WITH THE SEC, AS AMENDED FROM TIME TO TIME. Stelshi and Stelphi have retained MacKenzie Partners, Inc., a proxy solicitation firm, in order to assist it in communicating with Stelmar shareholders in connection with Stelmar's November 16, 2004 special meeting of shareholders to vote on the proposed merger with Fortress. Stelshi and Stelphi urge all Stelmar shareholders to protect the value of their investment by voting against Fortress' efforts to buy Stelmar at a discounted price. (1) Stelmar's peer group is TK, OMM, OSG, TNP, GMR, FRO.
New York, November 5, 2004 - Stelios Haji-Ioannou, founder of Stelmar Shipping Ltd (NYSE:SJH), and Chairman of EasyGroup (which includes EasyJet, Plc) (LSE: EZJ), and Polys Haji-Ioannou said today that they believe Institutional Shareholder Services ("ISS") reached the wrong conclusion in its recommendation regarding Stelmar’s acquisition by Fortress Investment Group ("Fortress"). Stelios Haji-Ioannou said, "We are perplexed by ISS’ decision, particularly given the fact that we believe its recommendation is inconsistent with the points ISS raises in its analysis. In its report, ISS notes that the Stelmar – Fortress transaction eliminates Stelmar shareholders’ ability to benefit from the forward momentum of the industry. Further, ISS questions the transparency of Stelmar’s auction process and notes that Stelmar management may have squandered the opportunity to obtain greater value for shareholders from another bidder. ISS also acknowledges that management interfered with the rights of shareholder by making self-serving amendments to the company’s bylaws. We are convinced that the Stelmar – Fortress transaction is NOT in the best interest of shareholders and as two of the largest shareholders of the company, we intend to vote our shares against the transaction and urge our fellow Stelmar shareholders to do the same." In its report, ISS noted:
In commenting on management’s decision to amend Stelmar’s bylaws and eliminate shareholders’ ability to take action outside of the company’s regularly scheduled annual meetings, ISS noted in its report that:
*Permission to use quotations neither sought nor obtained. IMPORTANT INFORMATION SECURITY HOLDERS ARE ADVISED TO READ THE PROXY STATEMENT AND OTHER PROXY MATERIALS WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. THE PROXY STATEMENT (WHEN IT BECOMES AVAILABLE) WILL BE, AND THE AFOREMENTIONED LETTER IS, AVAILABLE FOR FREE AT WWW.SEC.GOV, ALONG WITH ANY OTHER RELEVANT DOCUMENTS. YOU MAY ALSO OBTAIN A FREE COPY OF THE PROXY STATEMENT (WHEN IT BECOMES AVAILABLE) OR THE LETTER BY CONTACTING MACKENZIE PARTNERS AT 212-929-5500, OR TOLL-FREE AT (800) 322-2885, OR BY SENDING AN EMAIL TO proxy@mackenziepartners.com. INFORMATION REGARDING THE NAMES OF PERSONS WHO MAY BE DEEMED TO BE PARTICIPANTS IN THIS SOLICITATION OF STELMAR’S SHAREHOLDERS, AND THEIR DIRECT AND INDIRECT INTERESTS, BY SECURITY HOLDINGS OR OTHERWISE, IS AVAILABLE IN THE PARTICIPANTS’ SCHEDULES 13D FILED WITH THE SEC, AS AMENDED FROM TIME TO TIME. Stelshi and Stelphi have retained MacKenzie Partners, Inc., a proxy solicitation firm, in order to assist it in communicating with Stelmar shareholders in connection with Stelmar’s November 16, 2004 special meeting of shareholders to vote on the proposed merger with Fortress. Stelshi and Stelphi are communicating with Stelmar shareholders by means of an exemption under the federal proxy rules. Stelshi and Stelphi urge all Stelmar shareholders to protect the value of their investment by voting against Fortress’ efforts to buy Stelmar at a discounted price. Stelios and Polys Haji-Ioannou urge Stelmar Shareholders to vote 'against' sale of Stelmar to Fortress Investment Group posted: Nov 2, 2004 Stelios, Founder of Stelmar Shipping, and Polys send letter to Stelmar Shareholders November 2, 2004 The following is the text of a letter written on behalf of Stelios Haji-Ioannou, founder of Stelmar Shipping Ltd (NYSE:SJH) and Chairman of easyGroup which includes easyJet (LSE: EZJ), and Polys Haji-Ioannou to Stelmar shareholders: Dear Fellow Stelmar Shareholders: We want you to know that we will vote our 3,550,610 shares, or 20.21% of the outstanding shares as of the October 14, 2004 record date, of Stelmar Shipping Ltd. AGAINST the proposed acquisition of Stelmar Shipping Ltd. (“Stelmar” or the “Company”) by affiliates of Fortress Investment Group LLC. We strenuously oppose this transaction and urge you to do the same. On November 1, 2004, Stelmar stock closed at $38.76, which is well above the $38.55 per share purchase price to be paid in connection with the Fortress transaction. We believe that this clearly demonstrates that the market recognizes that the Fortress offer fails to maximize shareholder value and is not in the best interest of shareholders from a financial perspective. We believe that the Board has failed to carry out its fiduciary obligations to the Stelmar shareholders by approving and recommending the sale to Fortress. We believe the Fortress offer fails to maximize shareholder value at a time when the shipping sector continues to strengthen. You should know that since September 20, 2004, the date of the Fortress announcement, the shipping industry has continue to perform well, and Stelmar’s peer group (TK, OMM, OSG, TNP, GMR, TOPT, FRO) was collectively up approximately 18%. We urge you to vote AGAINST the Fortress transaction. Among its many oversights, management, has over the past year:
The above list of oversights, which is not exhaustive, leads us
to believe that the auction process was not open and fair but was instead motivated
by the competing self interests of the senior management of Stelmar. In the interest of all shareholders, we will continue to actively oppose the Fortress transaction and will ask for your vote to stop it. WE URGE YOU TO DEMONSTRATE YOUR OPPOSITION AS WELL AND SEND A MESSAGE TO THE STELMAR BOARD BY RETURNING THE PROXY CARD PROVIDED BY MANAGEMENT WITH A VOTE AGAINST THE PROPOSED MERGER AS SOON AS POSSIBLE. IF YOU HAVE ALREADY SENT IN YOUR PROXY CARD, YOU HAVE EVERY RIGHT TO REVOKE IT AND SEND IN A NEW PROXY BY ANY METHOD OF YOUR PLEASURE SUCH AS BY FAX (+212 750-5799), TELEPHONE OR THROUGH ANY OTHER ELECTRONIC MEANS. If you hold your shares in a brokerage account or other nominee form and wish to change your vote, please contact you broker or other nominee and tell him or her that you wish to revoke your proxy and vote AGAINST the proposed Fortress merger. THIS VOTE IS ALL ABOUT SHAREHOLDER VALUE WE BELIEVE THE MERGER WILL NOT MAXIMIZE YOUR INVESTMENT IN STELMAR. Under the terms of the proposed Fortress transaction, all of our shares of common stock will be cancelled and will be converted automatically into a right to receive $38.55 per share in cash, without interest. We strenuously object to this transaction as we believe that it fails to provide the shareholders with adequate value for their investment in Stelmar as evidenced by a comparison of this proposed purchase price with OMI’s offer of 3.1 OMI shares in exchange for one Stelmar share. Accordingly, OMI’s proposal would value Stelmar today at about $55.34 per a share (calculated by multiplying 17.85 by 3.1, which amounts to $55.34), or approximately 44% more than the Fortress cash offer based on the November 1, 2004 closing price of OMI and Stelmar stock ($55.34 minus $38.55 equals $16.79, and $16.79 divided by $38.55 equals 43.54%), assuming that the OMI shares to be issued pursuant to the OMI proposal would retain their value until the closing of the proposed transaction. Additionally, Overseas Shipholding Group Inc., which we refer to as OSG, offered 0.85 of their own shares for each Stelmar share in May 2004, which today is valued at $48.71 (calculated by multiplying 57.30 by 0.85, which amounts to $48.71) or approximately 26% more than the price being offered by Fortress ($48.71 minus $38.55 equals $10.16, and $10.16 divided by $38.55 equals 26.34%), assuming that the OSG shares to be issued pursuant to the OSG proposal would retain their value until the closing of the proposed transaction. If you vote to approve the Fortress transaction and it consummated at $38.55 per share, you will not be able to fully maximize the potential for your personal investment in Stelmar, which closed at $38.76 on November 1, 2004. MANAGEMENT’S MAIN PRIORITY IS TO ENTRENCH ITSELF, RATHER
THAN MAXIMIZE SHAREHOLDER VALUE.
Please take a moment to review the information contained in our
proxy statement (when it becomes available) in which we describe our opposition
to the Fortress merger in greater detail. We plan to file a proxy statement with
the SEC on our Schedules 13D, which are available for free on www.sec.gov, and
mail the proxy statement to you before the Special Meeting on November 16, 2004. We firmly believe that the Fortress transaction is not in the best interest of Stelmar shareholders and urge you to cast your vote AGAINST the proposed merger with Fortress. Instead, we believe that an auction process is the only truly full, fair and open means - untainted by the interest of management, who have repeatedly breached their trust with the shareholders—which we expect will yield better value for the shareholders. Please join us in this effort to pursue an auction process that protects the interests of Stelmar shareholders. Very truly yours, STELIOS HAJI-IOANNOU POLYS HAJI-IOANNOU IMPORTANT INFORMATION SECURITY HOLDERS ARE ADVISED TO READ THE PROXY STATEMENT AND OTHER PROXY MATERIALS WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. THE PROXY STATEMENT (WHEN IT BECOMES AVAILABLE) WILL BE AVAILABLE FOR FREE AT WWW.SEC.GOV, ALONG WITH ANY OTHER RELEVANT DOCUMENTS. YOU MAY ALSO OBTAIN A FREE COPY OF THE PROXY STATEMENT (WHEN IT BECOMES AVAILABLE) BY CONTACTING MACKENZIE PARTNERS AT 212-929-5500, OR TOLL-FREE AT (800) 322-2885, OR BY SENDING AN EMAIL TO proxy@mackenziepartners.com. INFORMATION REGARDING THE NAMES OF PERSONS WHO MAY BE DEEMED TO BE PARTICIPANTS IN THIS SOLICITATION OF STELMAR’S SHAREHOLDERS, AND THEIR DIRECT AND INDIRECT INTERESTS, BY SECURITY HOLDINGS OR OTHERWISE, IS AVAILABLE IN THE PARTICIPANTS’ SCHEDULES 13D FILED WITH THE SEC, AS AMENDED FROM TIME TO TIME. Stelshi and Stelphi have retained MacKenzie Partners, Inc., a proxy solicitation firm, in order to assist it in communicating with Stelmar shareholders in connection with Stelmar’s November 16, 2004 special meeting of shareholders to vote on the proposed merger with Fortress. Stelshi and Stelphi are communicating with Stelmar shareholders by means of an exemption under the federal proxy rules. Stelshi and Stelphi urge all Stelmar shareholders to protect the value of their investment by voting against Fortress’ efforts to buy Stelmar at a discounted price. For further information about Stelios and Polys Haji-Ioannou, Stelshi Holding Ltd. and Stelphi Holding Ltd., please contact: Silence on the Stelmar conference call This afternoon Stelmar had a dial-in conference call on its third quarter results. As the Stelmar founder Stelios was keen to ask some key questions but despite following the instructions, his efforts to get a chance were unsuccessful. Perhaps easyTelecom should speed up its way to launch to try to ensure better telephone lines?! After failing to be heard, Stelios them emailed the questions. His text is as follows: I was logged into the conference call and
I kept pressing * 1 to ask a question from My questions would have been: First let me congratulate you for the great results. 1) to Stamatis (Stelmar CFO), how do you explain your comment recorded during the fortress call about a preference for cash? 2) to Nick (Stelmar chairman), how does the
statement in the proxy on page 13 "that it should not enter into discussions
with OMI regarding it's proposal" support shareholder value? Even the proxy
does not say it was? Perhaps you can explain why that decision was made? Would
you care to reply in writing now?
Stelios Haji-Ioannou Letter from Stelios to Nick Hartley, chairman of Stelmar Shipping posted: Oct 16, 2004 Nick, I have briefly reviewed the proxy materials published on the 15th of October 2004 on the Stelmar website in connection with the proposed transaction with Fortress. As you know, on November 16 the Stelmar shareholders will decide by a majority vote if they want to accept the cash offer of $38.55 a share. I will reserve final judgment on how I intend to vote the Stelshi Holdings Ltd. shares until I have fully reviewed and analyzed these materials and until I have reviewed the share prices of other shipping stocks at the time. I am planning to attend the meeting in New York in person. Whatever the outcome of the shareholder vote, however, I may still pursue a class action against the Stelmar Officers and Directors for the approximate $200 million in shareholder value lost, which, if upheld, will be divided among all shareholders who are members of the class. Please put all applicable insurers on notice for these claims. The failure of the Stelmar directors to fulfil their fiduciary
obligation when they decided on the 6th of June “not to enter into discussions
with OMI regarding its proposal”, in my view, has had horrible consequences
for the shareholders. The offer for 3.1 OMI shares for each Stelmar share would
value Stelmar today at about $51 a share, or approximately 33% more than the Fortress
cash offer, which has been favoured by the Officers and Directors in order to
keep their jobs. I note that in the proxy statement, which contains some 100 pages,
that disastrous decision is described in one sentence only on page 13, without
any explanation or justification whatsoever as to the reasons the directors reached
that decision. One can only assume it was in order for management to keep their
jobs. Management’s efforts to ignore these losses by stating that OMI would have under-performed in the sector had it acquired Stelmar are wrong. Even if one were to assume significant relative underperformance compared to the rest of sector, the value to shareholders of the OMI bid would be substantially greater than that which the Board of Directors has put on the table for consideration. Additionally, other parties interested in the sector have offered more than that provided in the current transaction. In May 2004, OSG, negotiating with me without a signed confidentiality agreement, offered me 0.85 OSG shares for each of my Stelmar shares. OSG lost out in that unofficial tender to OMI. At today's prices, the OSG offer amounts to about $47 per share or 21% more than the current offer favoured by the Board of Directors. This is one more fact that shows that the Officers and Directors’ preference for cash, as clearly articulated by the CFO during the Fortress conference call, has destroyed some $200 million in equity value. I note that on page 15 the section titled “reasons for the merger” does not mention the preference for cash that the CFO mentioned during the conference call. One can only assume that this preference was informally communicated to the bidders with the view to discourage offers in shares by other listed shipping companies. Given these facts, the Board’s contention in the proxy statement that the auction process was full, fair and conducted in a way to maximize shareholder value is, in my view, highly suspect. By separate letter, Stelshi Holdings Ltd. is making a demand for
the list of shareholders in the event I decide to solicit a Proxy for consideration.
As you are aware the securities laws of the United States and the Liberian Code
require that you provide this information. Your cooperation is expected and appreciated. When directors make the wrong decisions for reasons of self-interest, they have to be held accountable in a court of law. Here, the consequences of these breaches of fiduciary duty have been very costly. Regards
Stelios Haji-Ioannou A further statement from Stelios about Stelmar Further to publishing my lawyers' letter to Stelmar yesterday, and given the risk evident from today's publicity that the messages can be lost, I would like to sum up my views on the two issues which are separate and distinct from each other: In my view, there is a significant question as to whether the directors acted in breach of their fiduciary duties when they refused even to talk to OMI in May 04. Had they accepted the 3.1 OMI shares offered for each Stelmar share back then, today our company would have been worth some $140 million dollars more than what they have accepted now. I continue to reserve my rights in that respect and am reviewing the options available to me. In my view, on the basis of the Board's recent actions, shareholders
should question whether the directors held a fair auction of Stelmar and in my
view, these questions can only be answered through complete transparency of the
processes. In my view, Shareholders need more information in two areas: a) was
there a higher offer to exchange shares for shares, however tentative, which the
directors discouraged in order to keep their jobs? b) what remuneration, however
tentative, has been offered to any of the officers or directors since May 04.
We need to know whether, and, if so, how much the officers and directors have
enriched themselves in this process. In my view, any remuneration should be put
to the shareholders for a separate vote. I remain concerned about the process undertaken to date and I continue to review all options as I await meaningful information from the Company on these important issues.
Stelios Stelios announcement on Stelmar Shipping The media are reporting today that Stelmar, the tanker business founded by Stelios, has announced that it will be purchased by the Fortress Investment Group. Stelios has issued the following statement... Peter King, Esquire
Shearman & Sterling LLP Broadgate West 9 Appold Street London EC2A 2AP RE: Stelmar Shipping Ltd. Proposed Sale to Fortress Dear Peter As you are aware, we represent Stelshi Holding Ltd. and its sole shareholder, Stelios Haji-Ioannou, (collectively “Stelshi”), in its capacity as a shareholder of Stelmar Shipping Ltd. (the “Company”). Stelshi has read with great concern the announcement that the Board of Directors of the Company has approved a merger with affiliates of Fortress Investment Group LLC (“Fortress”) for $38.55 cash, per share. As you are no doubt aware, no consultation of the Haji-Ioannou family has been made as part of its so-called “strategic review” of transactions intended to maximize shareholder value. Rather, it appears that management has retreated into a bunker, attempted to amend the Company’s Bylaws to prevent shareholder action against management, and has voted in favor of a combination which elevated its interests over those of the shareholders. Stelshi strenuously objects to this merger as it fails to provide the shareholders with adequate value for their investment in the Company. This failure is evidenced by a comparison of this proposed merger with the previous OMI offer. Based upon Friday’s closing price for OMI, the Fortress merger is some $8 per share less than the previous OMI proposal which the board took only a few days to reject while flatly refusing even to enter into a discussion with OMI. That decision was clearly a failure by the Board of Directors to consider a viable way to maximize shareholder value and to the extent that shareholder value has been lost forever, our client intends to hold them personally liable for it. By multiplying the Company’s 17.4 million shares by $8 per share, the shareholders have already lost approximately $140 million in value. The Board of Directors’ acceptance of Fortress’ lower offer demonstrates management’s desire to entrench itself and remain in place after a sale of the Company, rather than to fulfill its fiduciary obligation to maximize shareholder value. This coupled with the Board of Director’s recent actions attempting to amend the Company’s Bylaws to deprive shareholders of their rights and the loans taken by Director and Chief Executive Officer Peter Goodfellow and Director and Chief Financial Officer Stamatis Molaris in violation of, inter alia, Liberian law, all serve to demonstrate that the Board of Directors does not have the best interest of the shareholders in mind. Stelshi also objects in the strongest possible terms to the extent that full and fair consideration is not being given to opportunities that have the most promise for maximizing shareholder value. In the teleconference held earlier today, the CFO said clearly that preference was given to cash offers. Our client believes that the Company has received offers of a higher value by other shipping companies which were discounted because they were offers for the exchange of shares which were threatening to management. While the Board is hiding behind excuses of confidentiality about its proxy solicitation, our client requests an unequivocal statement as to whether any other party made a higher offer or indication of interest that remained “on the table” through last week, leaving aside if they contained customary conditions. In any event, our client seeks the Company’s views as to whether the acquisition entity set up by Fortress for this proposed transaction has the resources to complete the transaction without financing. Stelshi is compelled to once again remind all of the officers and directors of the Company that they have fiduciary obligations and duties of loyalty to the shareholders which transcend any personal interests they may have in a given transaction. To the extent that the Board of Directors and Officers of the Company ignore these duties or compromise them as an accommodation to current management, Stelshi is prepared to proceed to hold all those involved personally liable for the resulting harm to the owners of the Company through the pursuit of all meritorious claims. Further, Stelshi demands that any compensation to the officers and directors since the announcement of the OMI offer—and especially in the proposed Fortress transaction no matter how preliminary or conditional they are—be disclosed in detail and put to the shareholders for a vote. Our clients request that the Company and its Board of Directors take all necessary steps to ensure that they are undertaking a process that ensures that shareholder value is maximized and not further devalued. Unfortunately, no information was provided by the Company in its teleconference today which could provide the shareholders with any confidence that such reasonable steps were, or are, being taken. Stelshi is considering alternatives and reserves the right to take appropriate measures without further notice. In your letter of Friday, September 17, 2004, you indicated that
the Board of Directors needed more time to respond to the significant corporate
governance irregularities raised in my last letter. With due respect, if the Board
of Directors has had time to put the Fortress deal together, it certainly has
the ability to respond to the allegations raised by owners of the Company. This
is but another example of the directors and officers attempting to avoid accountability
to the Company’s owners. I expect a response not later than the close of
business on Monday, September 27, 2004. Stelshi reserves its rights to seek judicial
assistance in connection with these demands for fulfillment of the fiduciary duties
to the Company’s shareholders without further notice to the Company. W. Scott O’Connell A letter from Stelios to Stelmar Shipping demanding
that they re-schedule their annual meeting which was held illegally Stelmar is the shipping business founded by Stelios in 1992 which he listed on the New York stock exchange in 2001. Stelios stepped down as chairman in 2002 but remains a significant shareholder in the business with the Haji-Ioannou family owning 27% of Stelmar shares. Nick Hartley Re: Demand for Corrective Action Dear Mr. Hartley This firm represents Stelshi Holding Ltd., and its sole shareholder Stelios Haji-Ioannou (“Stelios”)(collectively “Stelshi”), in their capacity as Shareholder of Stelmar Shipping Ltd. (the “Company”). Recent actions by officers and directors of the Company have denied or removed from all shareholders rights provided under the Company’s Articles of Incorporation, the Liberian Business Corporation Act and the securities laws of the United States. These actions are, in a word, outrageous, and are calculated to prevent shareholders from taking necessary action against egregious examples of mismanagement and unlawful conduct. Pursuant to Section 7.16.3 of the Liberian Business Corporation Act (the “Act”), Stelshi hereby makes demand on the Board of Directors and the Officers of the Company to take immediate corrective action as detailed below in order to avoid the commencement of a shareholders’ action. As you know, in February, 2004, the Audit Committee learned from its independent auditors that Chief Executive Officer Peter Goodfellow and Chief Financial Officer Stamatis Molaris took non-interest bearing loans from the Company in violation of Section 6.12 of the Act and Section 402 of the Sarbanes-Oxley Act of 2002. The Act states in relevant part as follows: A Loan shall not be made by a corporation to any director unless it is authorized by vote of the shareholders… A loan made in violation of this section shall be a violation of the duty to the corporation of the directors approving it… At no time did the Company or the Board of Directors bring these unlawful loans to the attention of the shareholders for approval. Stelios directly and through George Karageorgiou, expressed to you his extreme displeasure and lack of confidence and trust in management. Stelios asked Mr. Karageorgiou to resign from the Board in protest over the way in which the Board and management dealt with these improper loans—a fact that was never properly disclosed to shareholders. Stelios also indicated Stelshi’s intention to vote its shares against the re-appointment of Mr. Molaris as a director at the forthcoming annual shareholder meeting. Following Stelios’ sharp criticisms, management and the Board of Directors took improper action which was calculated to prevent shareholders from voting against management and which permitted Peter Goodfellow and Stamatis Molaris to trade on material non-public information concerning shareholder discontent with management. Measured by any applicable legal standard, this conduct is improper. The applicable facts are as follows:
Stelshi demands pursuant to Section 7.1 of the Act that the Board of Directors take immediate action to re-schedule the adjourned meeting and to provide the required notice of the new date and time to all shareholders. Stelshi makes further demand that the Board of Directors add to the existing agenda of the annual shareholder meeting the questions as to whether Messrs Goodfellow and Molaris should be removed for cause pursuant to Section 6.7.1 of the Act for the unlawful loans made in violation of Section 6.12 of the Act and Section 402 of the Sarbanes-Oxley Act of 2002. Stelshi makes further demand that the Board of Directors repeal each of the changes made to the ByLaws on May 27, 2004. The purported amendments are invalid attempts to impede the shareholders’ vote protected under the Articles of Incorporation, the ByLaws and Liberian law. As such, the Board of Directors breached its duty of loyalty to the Company’s shareholders by attempting to significantly alter shareholder voting rights to the detriment of shareholders and intentionally thwarting the effective exercise of shareholders’ voting franchise. Consequently, the purported amendments should be set aside. Alternatively, the shareholders should be given their franchise rights under the Articles of Incorporation, ByLaws and Liberian law to vote to repeal any or all of these recent changes at the re-scheduled shareholder meeting. If a new notice with these additions is not received within five business days of this demand, Stelshi intends to provide such notice to shareholders for a special meeting to be held as soon as practicable. Under separate cover, I understand that Stelphi Holdings Ltd.- which owns in excess of ten percent of the outstanding shares— demands pursuant to Section 7.1 of the Act that a meeting of shareholders be convened as soon as practicable. Stelshi joins in this demand. Stelshi reserves all of its rights and remedies to proceed either in the name of the corporation in a derivative action or in its own name against all those responsible for this egregious, improper and unlawful conduct. Very truly yours, W. Scott O'Connell Unsolicited offer for 100% of Stelmar shares received
by Stelios Haji-Ioannou Stelios writes: "On Friday 16 July, I received a copy of the following unsolicited letter, which I think should enter the public domain. At this stage, it is the Board's responsibility to maximize shareholder
value by reviewing seriously any and all offers being made for Stelmar. I hope
the board will GOLDEN ENERGY MANAGEMENT S.A. Athens, 15th July 2004. Dear Mr. Hartley, Subject: Proposal to acquire up to 100% shares of Stelmar ("the Company") You are probably aware that the Company has over the past year expressed interest in acquiring Golden Energy's fleet of product tankers. We have noted your board's interest in developing strategic alliances and/or pursing mergers and, in view of your imminent board meeting next week, we have taken the liberty to write to you with a proposal which Golden Energy invites you to put before the Company's board for turtber deliberation. After careful consideration with our financial advisors, Golden Energy wishes to register its interest in acquiring the Company in full on the basis that the board of the Company accepts in principal and entertains favorably Golden Energy's wish to take over control of the Company, subject of course to standard due diligence amongst other things. We would welcome the opportunity to enter into more formal discussions regarding the terms of our proposal should your board wish to investigate this matter further. We trust that you and the board will give serious consideration to our proposal, and we look forward to hearing from you. Sincerely yours, Victor Restis For and on behalf of Stelios claims the Stelmar AGM was illegal posted: July 9, 2004 Below is the text from an email from Stelios to Nick Hartley, the chairman of Stelmar Shipping. Stelmar was founded by Stelios in 1992 and listed on the New York stock exchange in 2001. Although Stelios has stepped down as chairman of Stelmar he remains a significant shareholder with his family owning 27% of the company's shares. Stelios also founded easyJet in 1995 which listed on the London stock exchange in 2000. Stelios has stood down as chairman of easyJet but remains the largest shareholder, with his family owning 41% of the airline's shares. The stock ticker for Stelmar is (NYSE:SJH) and the ticker for OMI Shipping is (NYSE:OMM). The stock ticker for easyJet is (LSE:EZJ). "Nick, More than two weeks have now passed since my email dated the 22nd of June in which I asked for further clarifications on the adjourned annual meeting. I have not seen any reply to that nor to the subsequent one dated 30th of June. In view of the above, I now believe that the board's failure to make a prompt public filing with the SEC about the adjournment of the annual meeting until a month after it purportedly took place, and only after my email to you on this matter, makes the second meeting null and void. I think you are duty bound to file a new notice and hold the meeting properly giving each and every shareholder the opportunity to vote and discuss matters under the item "any other business". I have spoken to several other shareholders and most of them were completely unaware of the meeting of the 19th of May. You, in effect, "stole" the shareholder vote by changing the rules in order to get the brokers, and not the true decision makers, to vote on the resolutions, and by deliberately withholding the date of the second meeting from me. Given the fact that the board has just rejected an offer which at today's OMM share price would have been worth well over $40 a share when the pre-bid stock price of SJH was in the mid-20's,and the fact that the CEO has reportedly recently sold at $28, means that the board has a lot to answer. These matters can only be adequately aired during a shareholder's meeting. Given the fact that you have removed any shareholder rights to call a special meeting and that OMI announced today that they are no longer interested in Stelmar, I feel these matters cannot wait until the second half of 2005, for the next annual meeting, to be publicly discussed. My fear is that you may have destroyed too much shareholder value to wait until then! Please confirm urgently that you will do the right thing and call another shareholder meeting!"
Stelios Stelios comments on the withdrawal of the OMI offer
for Stelmar OMI have today announced that they have withdrawn their offer for Stelmar, the shipping company which was founded by Stelios. As a result, Stelios has issued the following statement: "I am outraged by the refusal of the Board of Stelmar even
to engage in discussions with OMI. Refusing to investigate whether shareholder
value can be further maximized must be a breach of the board's fiduciary duties. I do hope the Stelmar board's refusal even to discuss the OMI offer as well as its deliberate decision to strip shareholders of critically important rights by purporting to amend the company's by-laws are just tactics designed to test the willingness of OMI to improve its offer. With OMI's announcement that it has decided to withdraw its offer I now have serious doubts about the effectiveness of such measures, and I urge the Stelmar board to reconsider its approach in order to maximize value for all Stelmar shareholders. If these tactics and the other decisions by the Stelmar board result in permanent value destruction, I reserve my right to take whatever action necessary to protect my investment in Stelmar. I would expect that other Stelmar shareholders will do the same."
Stelios Stelios' first comments on the proposed merger between
Stelmar and OMI (both NYSE listed) Stelmar shareholder Stelios Haji-Ioannou urges Stelmar board to act quickly in its consideration of OMI's merger proposal "Twelve years ago, I established Stelmar and took it public
in 2001. In the meantime, I have created and developed a number of other successful
companies, one of which, easyJet plc, is now listed on the London Stock Exchange.
Throughout this time, I have never taken up salaried employment nor have I ever
claimed expenses or perks. I have only worked for shareholder value. As for Stelmar,
the original investment was allocated by my father to all three of his children
and whilst each of us may have different portfolio strategies from time to time,
we all remain long-term investors in shipping.
Stelios OMI offers $563 million to buy Stelmar posted: May 25, 2004 Yahoo! Finance today reports on an offer to purchase Stelmar Tankers, the NYSE listed company that Stelios founded in 1992... click HERE
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