~10% Shareholder Believes Proposed Sale Represents an Egregious Take Beneath and Considerably Undervalues the Firm
Urges the Board to Contemplate Shareholders’ Finest Pursuits and Disclose the Firm’s 2025 Projections so Buyers Can Precisely Worth the Firm In opposition to the Deal Value
HOUSTON–(BUSINESS WIRE)–Bradley L. Radoff, who collectively together with his associates owns roughly 9.9% of the excellent shares of GSE Programs , Inc. (NASDAQ: NASDAQ:) (GSE or the Firm), as we speak despatched the under letter to GSE Programs’ Board of Administrators (the Board) indicating its opposition to the proposed take-private merger with Pelican Power Companions (Pelican).
GSE Programs, Inc.
6940 Columbia Gateway Drive, Suite 470
Columbia, MD 21046
Consideration: The Board of Administrators
October 18, 2024
Members of the Board,
I’m one in every of GSE’s largest shareholders, with an roughly 9.9% stake within the Firm. After reviewing the Firm’s belated and restricted disclosures, I consider the proposed sale to Pelican considerably undervalues the Firm and places management’s pursuits forward of shareholders’ greatest pursuits.
The Board, which collectively has restricted public firm expertise and de minimis share possession, seems to have allowed the Firm to develop liquidity points which have change into the premise for what’s seemingly a hearth sale. Now, with this deal, the Board is seemingly doubling down on its missteps by giving up on the Firm proper because the nuclear energy trade is getting into a renaissance that needs to be a major tailwind for GSE and its prospects for enhanced worth creation.
Regardless of GSE’s obvious runway for improved monetary efficiency, you might have refused to supply a view on the enterprise for 2025. Because of this, shareholders are unable to appropriately analyze the Firm’s prospects and consider a standalone future relative to the present deal. The Board’s rivalry that it can not present projections as a result of administration’s forecasts have traditionally been unreliable merely serves as an acknowledgment of your failures in relation to governing the enterprise and overseeing the manager management you place in place.
With respect to your determination to deprive shareholders of related info, it’s extremely uncommon that the Firm’s definitive proxy assertion for the merger didn’t include forward-looking enterprise projections. I seem like one of many many shareholders who’re upset with this inadequate disclosure. The Firm’s Type-8-Okay filed on October eighth, 2024 “ simply two weeks previous to the shareholder vote “ was purportedly solely put out in response to demand letters alleging comparable deficiencies and/or omissions relating to the disclosures made within the Preliminary Proxy Assertion or the Definitive Proxy Assertion.1
Within the October eighth 8-Okay, GSE supplied a mere glimpse of very encouraging and constructive projections that implied greater than $0.30 of quarterly earnings for a Firm that presently trades at round $4. The projections, whereas incomplete, seem to indicate that the Firm is starting to materially profit from the nuclear resurgence. Given this context, I’m calling on you to supply the market with customary disclosures relating to the Firm’s forward-looking projections so shareholders can take advantage of knowledgeable determination on the transaction. If the Firm continues to supply such restricted disclosures because it did within the October eighth 8-Okay, then it ought to at the very least reset the file date for the Pelican merger to allow the funding group to sufficiently digest this new, albeit restricted, info.
Whereas the Firm’s authorized counsel and bankers “ who stand to make hundreds of thousands if the deal goes by “ might have signed off on the disclosures so far, the Board ought to know that this deal fails the odor check. Nothing within the merger settlement prevents you from offering extra info and transparency to shareholders. I consider your determination to successfully hold GSE shareholders at the hours of darkness will outline your directorship at GSE and be a black mark for any of you who intend to pursue different director alternatives. Shareholders have lengthy reminiscences.
Whilst you have trumpeted Institutional Shareholder Providers’ current report as an endorsement, I do not consider shareholders ought to give it any credence. The report neglects to say the shortage of preliminary projections, the magnitude of the late projections and the current buying and selling exercise indicating that shareholders consider there’s extra worth than is being supplied by Pelican. The truth is, roughly 30% of the Firm’s excellent shares have traded at or above the deal worth this week.
In closing, I consider an impartial GSE has vital upside potential. The Board failed to supply projections previous to the file date after which reluctantly supplied restricted disclosure simply two weeks previous to the shareholder assembly. This set of circumstances, mixed with a comical equity opinion and egregious transaction bills, are very troubling. I as soon as once more demand regular course ahead projections in order that shareholders, who’re the house owners of the enterprise, can pretty consider the Pelican transaction.
Sincerely,
Bradley L. Radoff
__________
1 The Firm’s Type 8-Okay dated October 8, 2024.
THIS IS NOT A SOLICITATION OF AUTHORITY TO VOTE YOUR PROXY. DO NOT SEND US YOUR PROXY CARD. MR. RADOFF IS NOT ASKING FOR YOUR PROXY CARD AND WILL NOT ACCEPT PROXY CARDS IF SENT. MR. RADOFF IS NOT ABLE TO VOTE YOUR PROXY, NOR DOES THIS COMMUNICATION CONTEMPLATE SUCH AN EVENT.
View supply model on businesswire.com: https://www.businesswire.com/information/house/20241018616185/en/
Greg Lempel
greg@fondrenlp.com
Supply: On Behalf of Bradley L. Radoff
