Harbert Discovery Fund, LP and Harbert Discovery Co-Investment Fund I, LP (collectively “HDF”), the beneficial owners of more than 11.8% of the outstanding shares of Enzo Biochem, Inc. (NYSE:ENZ) (“Enzo” or the “Company”), today issued the following statement commenting on Enzo’s January 28, 2020 press release announcing the postponement of its 2019 Annual Meeting of Shareholders (the “Annual Meeting”) to February 25, 2020 and proposing the potential expansion of its Board of Directors (the “Board”) to seven seats from the current five.
“We are disappointed – but not surprised – that the Company has taken this desperate action, which is nothing more than a transparent attempt to undermine the will of Enzo’s shareholders. As the Company knew, at the time of the Company’s announcement, HDF held proxies totaling over a majority of the outstanding shares in support of HDF nominee Fabian Blank, and more than a majority of the shares of any recent quorum in support of HDF nominee Peter Clemens, IV.1
Enzo’s attempt to claim some kind of credit for “no longer opposing” our nominees is ludicrous. Shareholders deserve better.
What is especially unfortunate is how wasteful and unnecessary the Company’s entrenchment maneuvers are.
We have always been open to finding a constructive and mutually agreeable solution with Enzo. When the Company proposed a settlement structure for the first time to us on January 22nd, it suggested that none of its directors step off the Board – even after all three leading proxy advisory firms supported the case for change. Nonetheless, we engaged with them and quickly submitted a counteroffer. However, three days later, on Saturday, January 25th, Enzo’s counsel rejected this and told us that they would not negotiate and would not budge from their initial position. Then yesterday Enzo stated in its own press release, “According to Enzo, the Company has attempted to reach an amicable resolution with Harbert…” This is not only nonsensical, it is simply disingenuous.
We strongly believe that it is not in the best interests of anyone – especially Enzo’s shareholders – to have to incur the additional costs associated with a delayed Annual Meeting and an expanded Board. Further, to enlarge the Board to seven directors would be completely out of line with what is necessary for a company of this size. It is ridiculous that Enzo’s directors have steered the Company down a pathway that would waste so much of shareholders’ money simply because they do not want to accept the outcome of a fair shareholder election. Ultimately, these actions are simply further evidence that Board refreshment is desperately needed at Enzo.
We will continue to pursue all available options, including potential legal recourse, to ensure that shareholders ultimately have the opportunity to have their voices heard at Enzo.
Shareholders who already voted on the BLUE proxy card will still have their votes counted at the Annual Meeting. However, we will be filing an updated BLUE proxy card following the Company’s filing of its revised proxy statement so that investors can express a preference on the Company’s proposal to expand the size of the board. We look forward to providing a further update to our fellow shareholders soon.”
Please visit our website at www.cureenzo.com to learn more.