Voce drops Argo board proposals after regulatory ‘flip-flop’

Activist investor Voce Capital Management has withdrawn its controversial board nominations ahead of insurer Argo’s annual general meeting after official state approval was revoked.

Voce said it had sought and obtained regulatory approval from the Departments of Insurance (DOI) for its proxy solicitation at Argo despite the fact it “in no way constitutes ‘control’ of Argo by Voce”. It said that every state – Illinois, New York, Ohio, Pennsylvania and Virginia – had granted approval.

“However, we have recently been advised by two states that they have now flip-flopped, at the 11th hour, revoking their prior approvals and casting doubt on our ability to proceed; Virginia became the second state to do so…”

It said that Argo’s “active role in lobbying the various DOI is clear and irrefutable”, adding that it believed officials had reversed their “previously well-founded positions as a result of Argo’s misinformation”.

It said “Virginia explicitly stated in its letter to us that it had ‘considered additional materials and information provided by Argo’ in rescinding its previous approval”.

Despite withdrawing its board nomination, the investor reiterated its call to shareholders to vote against Argo’s board nominees on the white proxy card and said that it was “reviewing all available legal, regulatory and other options available to protect shareholder rights”.

In response, Argo said “it was clear that shareholders were overwhelmingly supporting Argo, and that Voce did not have the support it needed for its proposals and director nominees”.

The statement added: “Rather than allow the process to continue and let shareholders decide the issue, Voce has chosen to abandon its activist campaign before the vote became final.”

Responding to Voce’s claims that Argo’s lobbying was the cause of approvals being revoked, Argo said it had not seen any of the notices, letters or materials exchanged between Voce and relevant state departments of insurance. “These matters have at all times been within the exclusive control of Voce, not Argo. However, based on Voce’s press release, it appears that Voce may have failed to take all steps or disclose all information required by the departments of insurance in a timely fashion.

“It is unfortunate that Voce, having failed to address such rudimentary state regulatory requirements well in advance of beginning its campaign, now offers this as an excuse for its decision not to let its proposals proceed to a vote.”

The insurer also reiterated its calls to shareholders to vote using the white proxy card in support of Argo’s directors.

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