Tandycrafts Hires Adviser
FORT WORTH, Texas (AP) _ Home-decor manufacturer Tandycrafts Inc. said Wednesday it has reached a six-month truce with disgruntled shareholders by sharing power and agreeing to hire advisers to consider the company’s options.
The Fort Worth-based maker of picture frames and other home-decorating items has lost more than $50 million in the past five years, and its stock has dropped from $26 per share in 1993 to below $2.
Dissident shareholders launched a proxy fight last summer, accusing management of failed strategies and poor performance.
The company said Wednesday that it has agreed to give three of six seats on the board of directors to two New York-based investment groups, Steel Partners II and Newcastle Partners.
In exchange, the groups agreed to hold off on their proxy fight for six months and both sides agreed to drop their lawsuits against each other, the company said.
``At the end of the 6-month standstill period, the company has committed to retain a nationally recognized investment banking firm to explore all strategic alternatives,″ said Warren Lichtenstein of Steel Partners.
Lichtenstein and Mark Schwarz of Newcastle Partners paid $5.8 million for 14.8 percent of Tandycrafts’ stock a year ago, then saw the value of their stake drop sharply.
The new board will include holdovers chairman and chief executive Michael Walsh, Sheldon Stein and Colon Washburn and three representatives from the investment partnerships: Lichtenstein, Schwarz and Glen Kassan.
Current directors Earl Cox and Jack Kahl will be removed from the board, the company said.
Walsh said the company is ``beginning to see the benefits″ of efforts to refocus the company on core businesses. The company has divested money-losing operations in sports licensing, gifts, office supplies, Christian bookstores and leather goods to focus on lines such as picture frames. It is also overhauling its Cargo Furniture unit.
Tandycrafts said it would file its annual financial report in early December and hold the annual meeting in mid-January.
In trading Wednesday on the New York Stock Exchange, Tandycrafts shares were unchanged at $1.38.
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