Chico's FAS board approves amendment to company bylaws over share acquisition
Chico's FAS issued an open letter to shareholders announcing additional actions that "demonstrate the Board of Director's ongoing commitment to strong corporate governance policies and practices, including additional Board-sponsored actions that ensure all Chico's FAS shareholders retain voting rights for each share they own." "Some years ago, Florida was one of a number of states to adopt a provision known as a control share acquisition statute, and as a company headquartered in Florida, this provision was automatically incorporated into our bylaws," it said. "In particular, Section 607.0902 of the Florida Business Corporation Act denies voting rights to an investor if it acquires 20% or more of the Company's shares, unless the voting rights are approved by a majority of unaffiliated shareholders at a special meeting." In the letter, the company said that while it has no shareholder that owns 20% or more of the company's shares, it believes that any stakeholders should have the right to vote those shares. "Accordingly, the Chico's FAS Board of Directors has unanimously approved an amendment to the Company's bylaws whereby the Company has opted out of the control share acquisition statute under the Florida Business Corporation Act," the company said. "This important action ensures that all of our shareholders have the voting rights we believe they deserve. It also eliminates the need for a Special Meeting, as recently requested by Sycamore Partners. Unlike the Special Meeting proposed by Sycamore, which would have applied only to Sycamore's shareholdings, this action by the Chico's FAS Board ensures that ALL shareholders will be entitled to freely vote their shares in the Company. As noted above, we strongly believe that all Chico's FAS shareholders, not just Sycamore, should have the right to vote the shares they own. To be clear, this bylaw amendment relates solely to voting rights; it does not speak to the merits of, or otherwise advance, Sycamore's unsolicited acquisition proposal, nor does it speak to whether the Company should engage with Sycamore on its proposal. As previously announced, Sycamore's June 19, 2019 proposal is being reviewed by the Board. On this point, we appreciate the strong support we have received from numerous shareholders for the Board's decision to reject Sycamore's May 10 acquisition proposal and the confidence expressed in our ability to improve the Company's growth and value creation. We also appreciate the strong support we have received from numerous shareholders over the past weeks for our new operating priorities and the improvements underway in these areas."