Tuesday, March 3, 2009

Orthofix asks for opposition to Ramius recommendation

By Marc Songini

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Boston-based medical device company Orthofix International NV is offering opposition to one of its shareholder’s moves to shake up the company.

The shareholder in question is Ramius LLC, a New York-based investment management firm with a five percent stake in Orthofix. Ramius has called for the sale of the company’s subsidiary Blackstone Medical Inc. Orthofix (Nasdaq: OFIX) bought the Springfield-based maker of spinal implant and instrument products for $333 million in 2006. Ramius also wants to get control of four of the 10 seats on the company’s board.

For its part, Orthofix management announced it had sent a letter to shareholders, voicing opposition to this, and urging them to vote against Ramius at a special meeting of the shareholders slated for April 2. In the letter, the management stated that “Ramius is an opportunistic, activist hedge fund that has engaged in numerous proxy contests over the past several years.” It also has proposed a slate of “inexperienced and problematic directors.”

Orthofix also claimed Ramius appeared “unable to manage its own affairs,” having been forced to close four of its funds in the past year. And, claimed the management, since the proxy contest started, “Ramius has demonstrated that, unlike your board, they have no plan.” For example, the board cited Ramius’ reversal of its plans to remove the Orthofix CEO from the board. Moreover, the original core strategy was to sell off Blackstone at any price, and now, said the board, Ramius has “no present plans to pursue (any) specific strategies.”

Additionally, Orthofix has made “significant progress,” which Ramius’ proposals would disrupt, according to Orthofix.

Orthofix reported a loss in fiscal 2008 of $228.5 million on revenue of $519.7 million.