MGPI concludes review, agrees to build momentum through current strategy
Nov. 11, 2013
by Eric Schroeder
ATCHISON, KAS. — It appears the feud between members of MGP Ingredients, Inc.’s founding family and other members of the company’s board of directors and chief executive officer Tim Newkirk may be over after a special committee of MGPI’s board of directors concluded its review of the company’s strategic alternatives. The committee determined that the best approach at this time to enhance long-term shareholder value is to continue execution of the company’s strategic plan to reposition the business for profitable growth.
“After a thorough review, it became clear that the best path to create value for shareholders was to build momentum with MGP’s current strategy,” said John Speirs, chairman of MGPI. “We will strive toward stronger cash flows from our bulk industrial alcohol business, while increasing the percentage of sales derived from higher margin premium spirits and specialty food ingredients.”
Karen Seaberg, granddaughter of Cloud L. Cray Sr., who founded MGPI in 1941, said the decision to stay with the current business strategy settled the main point of contention between the disagreeing parties.
“This was the crux of the entire proxy battle,” Ms. Seaberg said.
MGPI cut its May 23 annual meeting short after two members of the board, Ms. Seaberg and Cloud Cray Jr., refused to attend the meeting, citing a “growing concern with the lack of profitable growth, deterioration in the corporate culture, efforts to sell certain parts of the company’s business, efforts to amend the bylaws that would limit accountability to shareholders and increase the power of the chief executive officer, and the level of compensation paid to the chairman of the board of directors and the c.e.o. of the company.”
The company then initiated a review of strategic alternatives that it said would allow the company “to explore options that may accelerate the realization of value for the benefit of its stockholders.”
“While alternatives are reviewed, the company remains focused on executing on its operational plan to realize the long-term value of its assets,” MGPI said.