By Svea Herbst-Bayliss
NEW YORK, Nov 17 (Reuters) - Activist investor Barington Capital Group is ready to launch a second proxy fight at Matthews International MATW.O and told the casket maker on Monday that it intends to keep applying pressure even after the company agreed last week to sell its warehouse automation business.
"It seems to us that Matthews only acts decisively when under the spotlight as a result of our ongoing engagement," Barington CEO James Mitarotonda wrote to Matthews' Chairman Alvaro Garcia-Tunon in a letter seen by Reuters. Mitarotonda added Barington's director nominees "can provide significant value."
Some activist investors are mulling board challenges in the coming year to press global companies to perform better by making changes ranging from buying back shares to possibly selling themselves.
THE DETAILS
Barington owns 1 million shares in Matthews, or 3.2% of the company, having increased its holdings this year. It has been an investor since 2022.
Matthews' stock price has gained 1.2% since its annual meeting in February, trailing its peer group's 5.8% gain and the S&P 500's 9.6% advance during the same time.
Barington nominated three candidates, including Mitarotonda, for election at the 2025 annual meeting. None were elected.
Barington has not said how many directors it may nominate for the 2026 meeting.
Barington wants the company, a conglomerate with technology-focused businesses plus products for burying the dead, to discuss adding its director candidates to the board now and eliminate the need for another proxy solicitation.
A representative for Matthews did not immediately respond to a request for comment.
THE NUMBERS
Pittsburgh-headquartered Matthews has a market value of roughly $777 million.
Joseph Bartolacci has served as CEO since 2006.
During his 19-year tenure, Matthews' stock has lost 3.7%. Its peers' stock price gained 583% and the S&P 500 index gained 406% during the same time, Barington wrote in its letter.
During that time, Matthews has "deteriorated from a respected memorialization company with a strong market position into a chronic underperformer mired in strategic drift and burdened by excessive debt and spending," the letter said.
THE BACKGROUND
Barington agreed to serve as an adviser to Matthews from December 2022 to October 2024.
Bartolacci and the board "kept us at arm’s length while we served as an advisor, limiting interactions with us to quarterly meetings with management and a single presentation to the Board during which not one question was asked," the letter said.
Barington had support from three proxy advisory firms that guide how shareholders vote in this year's proxy fight.
The board made last-minute announcements, including commitments to make long-overdue corporate governance improvements, future changes to the board’s composition, the sale of the SGK Brand Solutions division, and a pledge to explore additional strategic initiatives to enhance shareholder value – culminating in the warehouse automation divestiture announced last week.
(Reporting by Svea Herbst-BaylissEditing by Rod Nickel)
((svea.herbst@thomsonreuters.com; +617 233 2138; Reuters Messaging: svea.herbst.thomsonreuters.com@reuters.net/))