NEW YORK (HedgeWorld.com)--The dispute between hedge fund manager Greenlight Capital and Mercer International Inc., a European pulp and paper manufacturing company, has been resolved with Mercer accepting a Greenlight nominee, Guy Adams, for its board of trustees.
In addition to Mr. Adams, Mercer will nominate an independent candidate proposed by three of its other largest shareholders for election as trustee at an upcoming annual shareholders' meeting. Greenlight ended its own proxy solicitation, and Mercer will file supplemental proxy materials to nominate the agreed-on candidates.
The company will reimburse Greenlight for some third-party costs incurred in connection with the proxy solicitation. Mercer shareholders are scheduled to meet on Aug. 22.
The hedge fund has complained about deficiencies in corporate governance at Mercer, while emphasizing that the company has excellent assets. Greenlight owns 14.9% of
Mercer's outstanding shares and is its largest shareholder. It has been an investor in Mercer since August 1997 Previous HedgeWorld Story.
"We believe this resolution will enhance investor confidence in the marketplace and ensure that the value of Mercer's assets are maximized for the benefit of Mercer's shareholders," said David Einhorn, Greenlight manager in a statement. He thanked Peter Kellogg, Coghill Capital Management and Cramer Rosenthal McGlynn for helping negotiate the agreement.