Activist Investor To Benchmark Electronics: 'Dismal Shareholder Returns Supports The Need For Immediate Change'

Engaged Capital's battle against Benchmark Electronics, Inc. BHE took an ugly turn Wednesday when the activist investor and major shareholder penned an open letter to Benchmark Electronics' shareholders. Related Link: Engaged Capital Delivers Letter To Benchmark Electronics, Highlights Management's "Lack Of Urgency" In Addressing Concerns

Engaged Capital has been pushing Benchmark Electronics' management to implement changes that could help boost the stock's value by as much as 50 percent. For example, the company's board of directors is following an "undisciplined and unsophisticated" approach to its capital allocation strategy.

In its latest letter, Engaged Capital stated that it has pushed management to implement changes for over a year. However, the company's leadership and Board of Directors has "shown themselves to be insular and resistant to change."

Engaged Capital continued, "It is clear to us and other shareholders that BHE's dismal shareholder returns supports the need for immediate change." The activist investor went to argue that the company's board of directors have "shown baffling resistance to shareholder perspectives," and investors "need representation in the boardroom."

Accordingly, Engaged Capital has nominated three "highly-qualified" directors who they "believe will provide the capital allocation, working capital and shareholder perspective that the Board desperately needs."

"The Company's insular culture, driven by what we believe is a close-minded, long-tenured Board, has thwarted our attempts to create value for all shareholders," Engaged Capital added. "Much of the strategic and corporate governance progress the Board claims, was begrudgingly made under pressure from us and we fear represents the minimum the Board thought necessary to appease shareholders. This is not enough. Benchmark's shareholders require an ownership mindset, fresh perspective and rigorous accountability to become the culture and norm in the boardroom."