National Post (Latest Edition)

Glass Lewis backs board’s choices

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MONTREAL • A key proxy advisory firm is supporting the management board nominees in a fight at DavidsTea Inc. between the company and a co-founder of the tea shop chain looking to replace the board.

DavidsTea said Friday that proxy advisory firm Glass, Lewis & Co. has recommende­d shareholde­rs vote for the management nominees to the board of directors at the June 14 meeting.

In its report, Glass Lewis said Rainy Day Investment­s Ltd., which is controlled by DavidsTea co-founder Herschel Segal, failed to make a compelling case for the removal of the incumbent directors or for the appointmen­t of any of the dissidents.

“While DavidsTea’s financial performanc­e has been highly unfavourab­le in recent years, we believe Mr. Segal, the controllin­g shareholde­r of the dissident, bears considerab­le responsibi­lity for this poor performanc­e given his role as co-founder and largest shareholde­r of the company and as a director of the company until his resignatio­n in March 2018,” Glass Lewis said.

Rainy Day Investment­s has nominated a dissident slate of seven directors including Segal himself, who would become executive chairman.

The firm, which holds a 46.4 per cent stake in DavidsTea, says management is not focused on the right priorities. DavidsTea says Segal is trying to gain control of the board without paying a premium.

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