UPDATE 3-Glass Lewis urges rival Media General nominee vote
(Adds Harbinger comment)
NEW YORK, April 14 (Reuters) - Proxy advisory firm Glass Lewis & Co has recommended that Media General Inc (MEG.N) shareholders vote for one rival nominee put forth by dissident shareholder Harbinger Capital Partners, Harbinger said on Monday.
Glass Lewis also recommended that shareholders of the newspaper publisher and television broadcaster not vote for Media General's own nominees, Harbinger said.
The proxy adviser's recommendation is the latest move in an increasingly fractious dispute between Media General, publisher of the Richmond Times-Dispatch newspaper, and Harbinger, an Alabama hedge fund that holds an 18.2 percent stake in the company's publicly traded shares.
Harbinger has urged the company to consider shifting its asset mix, saying it has made some poor decisions that have hurt its stock price.
"We believe that Glass Lewis's decision corroborates our view that the current Media General board of directors has not succeeded in delivering stockholder value and is in urgent need of media industry experience and a fresh perspective," Harbinger Vice President Joseph Cleverdon said.
Media General Chief Executive Marshall Morton earlier Monday told shareholders in a letter that shareholders should ignore Harbinger's choices.
In the letter, filed with the U.S. Securities and Exchange Commission, Morton said Harbinger does not understand the newspaper industry or the company and has proposed asset sales that are not in the company's best interest.
Media General's shares have underperformed its peers for an extended period of time, Glass Lewis noted, even though the company's board believes that its strategy represents the best alternative for shareholders.
"In our opinion, despite the company's strategic plan and turnaround efforts, Media General's share price has not traded in the 'middle of the pack' for some time," Glass Lewis wrote.
It also wrote that the board could benefit from an experienced and independent voice.
The advisory firm said shareholders should vote for J. Daniel Sullivan, but vote "withhold" for Harbinger's other two nominees, Eugene Davis and Jack Liebau Jr.
"We believe that nominee Sullivan has extensive operating experience in the media industry which could prove valuable to the company during its turn-around period," it also wrote.
Sullivan was president and chief executive of Quorum Broadcasting Co Inc and president and chief executive of television station owner and operator Sullivan Broadcasting Co Inc, according to a Harbinger proxy filing.
Harbinger last month won an effort to get The New York Times Co (NYT.N) to support two of its nominees for its board.
Separately, Media General continued its efforts to cut costs by offering buyouts to about half its 1,326 employees in the Florida Communications Group, which includes The Tampa Tribune newspaper and WFLA-TV.
The group has not determined the amount of money it wants to save or the number of employees that it must cut, but said the "cost savings needed are significant," according to an article posted on the Tribune's Web site.
Media General's shareholder's meeting is scheduled for April 24 in Mechanicsville, Virginia.
Media General's shares fell 25 cents, or 1.7 percent, to close at $14.48 on the New York Stock Exchange. (Editing by Jeffrey Benkoe and Carol Bishopric)
