No More Proxy Fight For MYR Group

Avondale Partners’ Daniel J. Mannes maintained a Market Outperform rating for MYR Group Inc MYRG, with a price target of $29.

The company has reached an agreement with Engine Capital, according to which the activist investor would ultimately receive 2 Board of Director seats. John Schuerman is to be included with immediate effect, while Arnaud Ajdler is scheduled to join after the 2016 annual meeting. With this, MYR Group’s BOD would be expanded to 11 seats.

“Mr Schauerman is an experienced construction professional with a long history at PRIM while Arnaud Ajdler is a Managing Member at Engine Capital,” analyst Daniel Mannes wrote, while adding, “The settlement did not include a provision for a strategic review or for a new BOD committee to review alternatives.”

Stalemate Ends

The agreement marks an end of a three-month stalemate between Engine and MYR Group. Moreover, the settlement seems “amicable to both parties and investors,” Mannes mentioned. He believes the outcome is good for both sides as it avoids “a costly and protracted Proxy fight.”

“We suspect that the two new board members will be proponents of a sale but given that they are only 2 of 11, it will likely take a while to get this point across. Barring an unsolicited bid that forces the BOD to react, we suspect a sales process is unlikely in the near term,” the Avondale Partners report noted.