(Reuters) - Egan-Jones Ratings Company said on Thursday it had withdrawn a proxy advisory report that recommended shareholders vote in favor of the board directors nominated by Tempur Sealy International Inc.
The report, which has now been taken down from the Egan-Jones website, did not take into account an April 2 regulatory filing by H Partners Management LLC, Kevin McManus, vice president and director of proxy services at Egan-Jones, told Reuters.
In that filing, H Partners, an activist investor that holds a 10 percent stake in Tempur Sealy, recommended that the company’s shareholders vote against the reelection of three of the board director nominations, including the company’s CEO Mark Sarvary.
Tempur Sealy, the world’s largest mattress company, cited the Egan-Jones report on Wednesday to argue that its shareholders should ignore another report from rival proxy-advisory firm Institutional Shareholder Services Inc (ISS) that sided with H Partners. Tempur Sealy declined to comment.
The Egan-Jones report that missed H Partners’ April 2 filing was available to subscribers on its website as late as April 19, according to a printout seen by Reuters. Egan-Jones said the report only took into account Tempur Sealy’s definitive proxy statement filed March 16.
“We are currently updating the report because this has become a proxy contest. I don’t think there was any intent to do this by anybody, I think this was an honest mistake,” McManus said.
Egan-Jones was now set to meet with Tempur Sealy’s management to solicit feedback in drafting an up-to-date report ahead of Tempur Sealy’s annual meeting of shareholders on May 8, according a person familiar with the matter who asked not to be identified discussing such a private meeting.
H Partners declined to comment.
Egan-Jones is the third largest advisory proxy firm after ISS and Glass, Lewis & Co LLC. It also provides credit rating services. Two years ago, Egan-Jones agreed to be barred for 18 months from giving officially recognized ratings on asset-backed or government securities to resolve charges by U.S. regulators it lied on registration forms.
Lexington, Kentucky-based Tempur Sealy cited the outdated Egan-Jones report on Wednesday based on the advice of D.F. King & Co Inc, a proxy solicitation firm. D.F. King declined to comment.
Reporting by Nadia Damouni in New York; Editing by Greg Roumeliotis and Andrew Hay