FIRST PROXY ACCESS NOMINEE? NOT SO FAST SAYS NATIONAL FUEL GAS CO.

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UPDATE: GAMCO Investors filed a Schedule 13D Nov. 28 indicating that Bakrow had withdrawn his name from nomination and that GAMCO would not be pursuing proxy access.

The first attempt to utilize a proxy access bylaw to nominate a director candidate has hit a major stumbling block. GAMCO Investors, Inc., an investment firm headed by billionaire investor Mario Gabelli, made big news earlier this month when it filed an amended Schedule 13D and Schedule 14N announcing it was nominating Lance A. Bakrow, co-founder and director of Greenwich Energy Solutions, for election to the National Fuel Gas Company (NFG) board of directors.

In an 8-K filed Nov. 23, however, NFG rejected GAMCO’s nominee.  In a letter attached as an exhibit to the 8-K, NFG explained the rejection:

A stockholder that seeks to use the Company’s proxy access By-Law provision must make certain representations and warranties to the Company. If these representations are not correct, the stockholder is not eligible to use proxy access. These representations include that an Eligible Stockholder:

(i) acquired the Proxy Access Request Required Shares in the ordinary course of business and not with the intent to change or influence control of the Corporation, and does not presently have such intent[.]

NFG further explained,

Based on GAMCO’s past conduct and current actions, the Board has determined that (1) GAMCO possessed an intent to change or influence control of the Company when acquiring some if not all of the Proxy Access Request Required Shares; and (2) GAMCO continues to have the intent to change or influence control of the Company. As a result, GAMCO’s Notice does not comply with the proxy access provision of the Company’s By-Laws, and the Company will not include GAMCO’s proposal in the Company’s proxy materials.

Because, in NFG’s view, GAMCO has not complied with the proxy access bylaw, the letter states that NFG will not include Bakrow as a nominee in its proxy materials for its 2017 annual meeting.