All 3 Proxy Advisors Urge Shareholders Vote FOR Change to Enzo Board

Harbert Discovery Fund, LP and Harbert Discovery Co-Investment Fund I, LP (collectively “HDF”), the beneficial owners of more than 11.8% of the outstanding shares of Enzo Biochem, Inc. (NYSE: ENZ) (“Enzo” or the “Company”), today announced that Egan-Jones Proxy Services (“Egan-Jones”) has recommended shareholders vote for both HDF nominees on the Blue proxy card. All three leading proxy advisors – Egan-Jones, Glass, Lewis and Co. (“Glass Lewis”) and Institutional Shareholder Services Inc. (“ISS”) – have now supported HDF’s case for change at Enzo.

In its report, Egan-Jones highlights the need for change at the Company, its track record of underperformance and corporate governance issues, as well as the qualifications of HDF’s nominees¹:

• “We believe that voting FOR the Harbert nominees is in the best interest of the Company and its shareholders.”

• “We believe that there is a validated need for change, as evidenced by the Company’s financial and operational underperformance, which have translated to value destruction for the past years.”

• “In our view, the shareholders have given the Company a considerable time to break the status quo of financial failure, however, the Board and management have engaged in misconstrued decisions, leading to broken promises to fix the Company’s current state.”

• “We believe that there is a compelling need to alter the Company’s corporate governance structure and practices in order to protect the interests of the shareholders in the future.”

• “We believe that the addition of the Harbert nominees will endow the Board not only with the right mix of skills, qualifications and experience, but will also bring forward fresh perspectives to execute the appropriate strategy to unlock and maximize shareholder value.”

• “Given the slate of nominees, the nominees appear qualified, and we recommend that clients vote FOR the nominees on the BLUE proxy card.”

Previously, ISS also recommended voting on HDF’s card, stating:

• “The dissident has made a compelling case that board change is warranted, as evidenced by operational deterioration, prolonged absolute and relative TSR underperformance, and substandard corporate governance.”

• “ENZ has a history of broken promises, as evidenced by the AmpiProbe development history.”

• “There are also board independence concerns, including the combined CEO/chairman role, the fact that 40 percent of the board is non-independent, and the family and professional relationships between Rabbani, Weiner, and Hanna.”

Glass Lewis found numerous reasons for urgent concern regarding the future of Enzo in its recommendation for both HDF nominees:

• “[W]e are ultimately inclined to conclude Harbert…submits the much stronger fundamental case.”

• “Disconcertingly, investors hoping to see a bold response steeped in critical measures of operational progress have instead been greeted by what we consider to be a fairly loosely structured narrative functionally ripped from Enzo’s last battle, including rehashed promises of pending value generation.”

• “On balance, we consider the yield on our review is fairly straightforward…the Company has underperformed every benchmark over every period, in all cases by no less than roughly 32%.”

• “[T]here remain a raft of other governance factors that we consider reflect poorly on Enzo and the board’s general willingness to undertake proactive — as opposed to reactive — change.”

Kenan Lucas, Managing Director and Portfolio Manager of HDF, commented on the news, stating: “We believe that unanimous recommendations for change from all three proxy advisory firms sends a clear message: the status quo is no longer acceptable at Enzo and fresh, independent voices are needed in the boardroom. Our nominees, Fabian Blank and Peter Clemens, have the right experience and skillsets to help Enzo become more than a story of broken promises, and to end the prolonged history of underperformance. We encourage any shareholder who cares about the future of their investment to vote today for both of HDF’s nominees.”

https://www.biospace.com/article/releases/all-three-proxy-advisory-firms-recommend-shareholders-vote-for-change-to-the-board-of-enzo-biochem-on-the-blue-card/