A shareholder who controls 9% of Schaumburg, Ill.-based Damen Financial Corp. has initiated a proxy fight as part of his yearlong effort to force the company to sell.
Paul J. Duggan, who owns shares in the former thrift with his investment fund Jackson Boulevard Fund in Chicago, is nominating himself and two others for vacant seats on Damen's board of directors.
Mr. Duggan is also asking shareholders to require the $228-million-asset company to hire an investment banker or form an independent committee to find a buyer, according to a preliminary proxy statement filed with the Securities and Exchange Commission on Dec. 22.
In mid-December Damen hired Keefe, Bruyette & Woods Inc. for counsel on whether to sell, but it has not asked the investment banking firm to actually solicit offers.
But sources close to the company said Damen has been quietly seeking a buyer for months. Stephen Skiba, a bank analyst at ABN Amro in Chicago, said the latest skirmish between Damen and Mr. Duggan may be designed to "remind everyone that the company is still for sale."
Both Mr. Duggan and Damen's board of directors are positioning themselves for the company's annual meeting, which Damen unexpectedly postponed a month until Feb. 26. Janine M. Poronsky, executive vice president, would not explain the delay.
Whether Mr. Duggan will prevail at the meeting is unclear. Mr. Skiba said Mr. Duggan's criticism may ring hollow to other investors now that Damen has hired Keefe Bruyette. But Mr. Duggan argued in his proxy statement that hiring an investment banker does not go far enough. Damen should have required the firm to solicit buyout offers, he said.
At the 1998 annual meeting, a similar proposal by another dissident received a majority of stockholders' votes. But the measure was defeated after some of Mr. Duggan's votes were thrown out on a technicality. Since then, Mr. Duggan has reduced his stake in the company to 9%, from 12%, to ensure that all of his shares will be counted.