Ahead of Argo's annual meeting on May 24 where shareholders will vote on the Bermuda re/insurer's board directors, 5.6 percent shareholder Voce Capital Management has now withdrawn its director nominees.
Voce, which has been very vocal in its criticisms of Argo over the past few months, suggested its supposed prior approvals for its proxy solicitation from relevant state insurance departments (DOIs) have now been revoked.
The activist shareholder went on to accuse Argo of lobbying DOIs into revoking these supposed approvals, suggesting it used “underhanded tactics” and “deception”.
“Earlier this year, Voce sought and obtained regulatory approval for its proxy solicitation at Argo from all relevant state Departments of Insurance (DOI),” Voce said in a statement. “Despite the fact that the solicitation of limited, narrow proxies in connection with an annual meeting of shareholders in an effort to elect fully-independent Director nominees in no way constitutes ‘control’ of Argo by Voce, we nonetheless cooperated with the state DOI procedures, responding to all inquiries posed and submitting extensive documentary information in support of our position. As a result, every state – Illinois, New York, Ohio, Pennsylvania and Virginia – granted approval for us to proceed prior to the filing of our definitive proxy statement on April 12, 2019.”
Voce continued: "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, in a letter dated yesterday. Argo’s active role in lobbying the various DOI is clear and irrefutable. We believe that the officials reversed their previously well-founded positions as a result of Argo’s misinformation. In fact, Virginia explicitly stated in its letter to us that it had ‘considered additional materials and information provided by Argo’ in rescinding its previous approval."
In response to these accusations from Voce, Argo suggested the activist shareholder had "failed to address such rudimentary state regulatory requirements well in advance of beginning its campaign, [and] now offers this as an excuse for its decision not to let its proposals proceed to a vote."
Argo explained: "As of last night, 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. 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.
"Argo has 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 department of insurance in a timely fashion."
Voce Capital Management, Argo Group, Bermuda