Zim’s board of directors receives a boost in the fight against the shareholders from Israel

Shareholders who own about 8% of the shares of the shipping company ZIM recently contacted the company and asked to appoint three directors on their behalf – Dr. CPA Keren Bar-Hova, Ron Hadassi and Ran Gritzerstein. However, after a few days, two veteran directors of Zim resigned, and in their place, Yair Avidan and Yoram Torbovich were added to the board of directors.

The shareholders in Zim will be asked to vote for which directors they wish to serve – the three shareholder candidates or the two who were added to the board of directors. Zim’s board of directors expressed opposition to the shareholders’ proposals and called on the shareholders to support candidates on their behalf, and vice versa. In total, the shareholders will have to choose eight directors from 11 candidates (including the incumbent directors and the three shareholder candidates).

Glass Lewis now writes that the concerns raised by the group of shareholders regarding the possibility of the acquisition by the management (remember, CEO Eli Glickman submitted an offer that was rejected) – ignore the fact that share ownership in the company is very decentralized, with the ten largest shareholders each holding only between 1.2% and 2.4%. In such an ownership structure, according to Glass Lewis, any purchase offer (whether from management or whether from an external buyer) will require broad shareholder support to materialize.

Glass Lewis adds that the board’s actions reflect a significant effort to ensure an unbiased process and that the opposing shareholders’ campaign is “based on claims, not on a well-founded assessment supported by evidence”, and that they did not present a convincing argument to choose their candidates.

They also refer to the issue of capital return (the possibility of paying a special dividend) and point out that the company operates in an industry that requires significant and particularly volatile capital, and has significant lease costs, so it must maintain sufficient liquidity.

The Chairman of the Zim Board of Directors, Yair Sarosi, said in response that he welcomes the recommendation to support the eight Zim candidates and against the three shareholder group candidates. According to him, “Now, when both Glass Lewis and ISS independently support our entire list of candidates and oppose the selection of the opposition group candidates, the shareholders have clear external confirmation that the board overseeing the strategic review is independent, Qualified and acting for the benefit of all shareholders. I hope that the Israeli institutional bodies will join all the investors in reaching the proper result. We are committed to continuing a transparent and careful process, even now that the exam is coming to an end.”