NEW YORK--(BUSINESS WIRE)--Rubric Capital Management LP (“Rubric”), an investment advisor whose funds and accounts collectively own approximately 14% of the outstanding equity of Mereo BioPharma Group plc (NASDAQ: MREO) (“Mereo” or the “Company”), today issued an open letter to Mereo’s shareholders. In its letter, Rubric details Mereo’s entrenching tactics in a desperate attempt to once more thwart Rubric’s effort to call a general meeting of shareholders.
Rubric has delivered yet another revised requisition today and is increasing the size of its slate of proposed directors to five director nominees, who it believes will provide the Board with the financial, regulatory, and strategic expertise to maximize value for all shareholders. The five highly qualified candidates for Mereo’s Board are: Annalisa Jenkins, MBBS, FRCP, Daniel Shames, MD, Marc Yoskowitz, Justin Roberts, and David Rosen.
The full text of the letter follows:
Dear Fellow Mereo Shareholders,
The Mereo Board has once again rejected our request for a special meeting based on the flimsiest of pretexts. On this occasion they cite the “basic legal requirement” that the requisition be delivered by a “registered shareholder”. On its face, this seems like a reasonable request but for the following facts they, once again, conveniently omit:
- Rubric delivered a requisition from two members. This included letters from our prime brokers, who maintain all shares within omnibus accounts, attesting to the fact that two funds managed by Rubric beneficially own Ordinary Shares in Mereo BioPharma in sufficient number to call a general meeting of shareholders
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In rejecting those attestation letters, the Board required Rubric (and, for the record, any other shareholder who wishes in the future to exercise their rights) to do the following:
- Convert digital holdings of Ordinary Shares into paper shareholder certificates, a process that was tedious, time consuming, and adds significant risk to maintaining proper custody on behalf of Rubric’s managed funds
- Request our prime brokers then to go to CREST, the electronic registry for the majority of the UK market, to have it remove the Shares from the digital records so our proof of ownership could be maintained on the physical certificates
- Finally, request our prime brokers to store our certificated shares in their respective vaults for safekeeping
Given the lengths this Board has gone to so far to prevent this requisition, if the vaults are the victim of a heist I think we can narrow the suspect list considerably.
Not since CSX held its 2008 annual meeting in an “inaccessible rail yard” in a futile attempt to prevent TCI/3G’s proxy challenge have we seen such depths of entrenchment and wasteful use of shareholder resources. These tactics have not deterred Rubric from its efforts, and we have completed them in order to deliver yet another revised requisition today.
Rubric has attempted, throughout this process, to operate with transparency about our intentions and clearly communicate as to why we believe our course of action to be in the best interests of shareholders. Our requests have thus far been met with bad faith, in both word and deed, by the Mereo Board.
It is clear to Rubric (and we hope other shareholders) that the problems on the Board of Mereo run deeper than we anticipated. In light of this development and our belief that further boardroom change is required to achieve the best outcome for shareholders, we are increasing the size of our slate of proposed directors to five in order to accommodate my nomination. My nomination will further bolster our strong slate of existing nominees and we believe will provide the Board with the financial, regulatory, and strategic expertise to maximize value for all shareholders.
Sincerely,
David Rosen
