InterCept Inc., which recently sold its troubled merchant processing unit, now faces a potentially bigger challenge than high chargebacks - a slate of rogue directors nominated by a hedge fund that wants to oust the management.
Jana Partners LLC of San Francisco started buying common stock in the Atlanta core processing and check imaging company since March 10 and now owns 8% of InterCept. Late Monday the hedge fund said it wants to replace four members of InterCept's six-member board with people who would vote to sell the company.
The main reason Jana cited was an inadequate effort by management to sell InterCept last fall, when a board committee was formed to explore options.
"We are pursuing this course of action because we believe that the actions taken by the board of directors of InterCept in connection with the recently proposed and aborted sale process for the company were not in the best interest of the company's shareholders," Barry S. Rosenstein, Jana's managing member, wrote in a letter Monday to John W. Collins, the chairman and chief executive officer of InterCept.
Responding to the letter, Mr. Collins said in a press release, "We urge InterCept's shareholders not to be misled by Jana's self-serving version of recent events." He also promised a more detailed response soon.
