I think people started to realize how important is to have the support and cooperation from the hedge funds if we want to see progress in making the BOD plan of capitalization/M&A work. People are looking for signs of unity. Here are a few I come up with.
1. It appears that Blackstone is the party that can be accepted by both BOD and majority holders (various hedge funds). I’ve elaborated on this idea before. It has the prestige, financial expertise, business connections, especially hedge fund ties, and knowledge of WMIH because of its involvement in WMI bankruptcy and reorganization. I tend to think that BOD members are not naïve, and should recognize the need to secure backings from the majority owners when conceiving the capitalization/M&A plan. I contend Blackstone was selected because it’s in a unique position to help the Board reach out to the hedge fund owners.
2. The passing of March 19th without re-incorporation is another interesting sign. If people are correct that the purpose of reincorporation was to fend off hedge fund attacks, and to extend the term of retail friendly BOD for another year, one can reason that the fact that the passing of 3/19 without fanfare is a good thing and a sign of relief. It could indicate, in my view, at a minimum, MW and the BOD didn't feel threatened by the hedge funds. It may also be a sign of mutual understanding and even cooperation. Delaying BOD election by re-incorporating is never the solution. It’s about cooperation, far out-weighing anything else.
3. If charlien is correct that the Corporate Strategy and Development Committee is composed by the members with SNHs ties (Eugene I. Davis, Chair), and TPSC ties (Michael Renoff. Not sure about the third member Diane B. Glossman, but she seems having Citi and other substantial financial experience), it’s likely that there have been some level of mutual involvement by the Board and the hedge funds from early on.
Of course, one can view the signs cited above in an opposite, negative way. For instance, re. 1, Blackstone is a mole for hedge funds as some suggested; re. 2, MW may not be relevant. The majority of the Board voted against re-incorporating; re. 3, Hedge funds are already in control of the Board. We’re in a delicate situation at an interesting time, I’m for questioning and vigilant, meanwhile, I tend to view the signs I cited in a positive way as described above.
Of course, the biggest sign (M&A and capitalization) hasn’t showed up yet, which is both puzzling and frustrating. Well, the shareholder meeting is fast approaching. We may get some answers or a peek at new signs.
