Business Wire 21-Mar-2017 7:30 AM
Asks Shareholders to Vote FOR the Companys Highly Qualified Directors on the WHITE Proxy Card
Visit www.VoteCTO.com for Additional Details on How to Support CTO
DAYTONA BEACH, Fla.--(BUSINESS WIRE)-- Consolidated-Tomoka Land Co. (NYSE MKT: CTO) (the Company or CTO) today announced that it has filed definitive proxy materials with the Securities and Exchange Commission (SEC) and is mailing a letter to the Companys shareholders in connection with its upcoming 2017 Annual Meeting of Shareholders (the Annual Meeting) to be held on April 26, 2017. Shareholders of record as of the close of business on March 2, 2017, are eligible to vote at the 2017 Annual Meeting.
The letter highlights CTOs track record of strong performance, dedication to shareholder interests and the qualifications of the Boards director nominees. Among other things, the letter notes:
Wintergreen, controlled by David Winters, intends to seek votes for four people to replace the highly qualified and experienced members of the CTO Board of Directors.
To protect the value of your investment, the CTO Board of Directors unanimously recommends that shareholders vote the WHITE proxy card FOR all of the Companys seven experienced and highly qualified director nominees: John P. Albright, John J. Allen, Laura M. Franklin, William L. Olivari, Howard C. Serkin, Thomas P. Warlow, III and Casey R. Wold.
CTOs definitive proxy materials, letter to shareholders and other materials regarding the Boards recommendation for the 2017 Annual Meeting of Shareholders can be found at www.VoteCTO.com.
The full text of the letter to shareholders follows:
YOUR VOTE IS IMPORTANT
YOUR INVESTMENT IS AT RISK
VOTE THE WHITE PROXY CARD TODAY FOR CONSOLIDATED-TOMOKAS HIGHLY QUALIFIED DIRECTOR NOMINEES
March 21, 2017
Dear Fellow Consolidated-Tomoka Shareholder:
We are writing to you today regarding Consolidated-Tomokas (CTO) upcoming 2017 Annual Meeting of Shareholders on April 26, 2017. In connection with the meeting, you must make an important decision regarding the composition of the CTO Board of Directors, which we believe will impact the future of the Company and the value of your investment.
As you may be aware, a CTO shareholder, Wintergreen Advisers (Wintergreen), controlled by David Winters, is seeking to elect four of its own nominees, including Mr. Winters and his associates, to replace members of the CTO Board of Directors. It is important to know that Wintergreen previously nominated directors and we appointed them to our Board. Today, these directors unanimously support the business plan being executed by the Board and management and oppose the campaign by Wintergreen.
We believe Wintergreen has a need for liquidity because of significant withdrawals from its mutual fund, Wintergreen Fund, that have reduced the Funds size by more than two-thirds in the last three years. We further believe that this need for liquidity is driving Wintergreens insistence on a sale or liquidation of CTO, which in our opinion would be detrimental to all other CTO shareholders.
Put simply, we believe Wintergreen is seeking to take control of your Company without paying a control premium to other shareholders. Yet, Wintergreen does not have an operating plan. Instead, we believe Wintergreen is attempting to gain control of CTO at no cost in order to orchestrate a self-serving sale or liquidation of the Company.
CTO IS EFFECTIVELY EXECUTING ITS BUSINESS PLAN AND COMPLETING VALUE-ENHANCING TRANSACTIONS
The CTO Board of Directors and management team are continuing to successfully execute the Companys business plan of profitably monetizing the Companys land holdings (which is proceeding rapidly, most recently with a large land sale of 1,600 acres for the Latitude Margaritaville age-restricted community) and reinvestment of the proceeds into income-producing properties on a tax-deferred basis. The results speak for themselves:
CTO has a disciplined and focused plan to deliver growth. Our Board and management team are performing well and the market is noticing.
CTO is in the early stages of a major transformation.given its local market knowledge of Daytona, the current management team is likely the best suited to handle the land monetization at this point. (David Corak, FBR & Co., January 2017) 2
CTO management has dramatically improved its shareholder communications and provides extensive disclosure about its financial results, assets and operations, including on regular earnings calls and quarterly investor presentations. We also held a 2016 Investor Day in Daytona Beach. Our compelling story has led to the Companys first ever equity research coverage, by FBR & Co. Notable results that we have disclosed include:
We remain confident that by continuing to execute on our plan of monetizing land and reinvesting the proceeds into income-producing investments on a tax-deferred basis, we will further maximize value for our shareholders.
WINTERGREENS MOTIVES ARE CLEAR: IT NEEDS LIQUIDITY TO PAY ITS WITHDRAWING CLIENTS
As recently as March 2015, Wintergreen praised CTOs performance in a letter to its clients:
The actions taken by CTOs management team and board over past four years have put the Company in position to benefit from [the Daytona Beach real estate market rebound].
Wintergreens involvement with CTO hasput a strong lineup of directors on CTOs Board. The Board in turn hired a very capable management team, which has transformed the Company into the profitable and growing enterprise it is today.
Under guidance from the Board, the new management team developed plans to attract new developers to Daytona Beach, from national home builders to Trader Joes to Tanger Factory Outlet Centers. They have grown and diversified their income property portfolio and increased outreach to potential investors.
So what happened?
Only six months after praising CTO, Wintergreen was attacking management and demanding that CTO be sold or liquidated. Why the change? By the end of 2015, Wintergreen Funds assets had plummeted by over 50% from the prior year. By the end of 2016, the Fund had lost another third of its assets through client withdrawals, and now has almost 14% of its assets in CTO.3
We believe Wintergreen Fund needs to sell CTO shares to pay Wintergreen Fund clients who are withdrawing from the fund. However, Wintergreen owns so many CTO shares compared with CTOs average trading volume that market sales are not a viable option for Wintergreen. We believe Wintergreen has determined that the only way to turn its CTO shares into cash is for CTO to be sold or liquidated quickly, even at a price that may not reflect fair value.
Do not let Wintergreen take control of CTO to solve Wintergreens own problems. We do not believe CTO shareholders should place their fate in Wintergreens hands. When deciding how to vote your shares, consider what famed investor Warren Buffett had to say about David Winters:
When David Winters, who runs a fund that has underperformed by every measure from inception, five years, one year, and who draws a 150 basis point fee, when you can go to Vanguard and do it for 17 basis points and he complains about compensation not being commensurate with performance at Coke. And then he has that kind of record himself, I think hes a fellow living in an all glass house. (Warren Buffett, CNBC, March 2015).
THE CTO BOARD RECENTLY CONDUCTED A STRATEGIC REVIEW AND UNANIMOUSLY CONCLUDED THAT THE CURRENT STRATEGY IS THE MOST VALUE-ENHANCING ALTERNATIVE
The Board explored a sale or liquidation last summer, and we remain open to conducting another strategic alternatives review process at the appropriate time.
Our independent directors, with the assistance of an independent financial advisor, Deutsche Bank, conducted a comprehensive review of the Companys strategic alternatives, including the sale of the Company, the sale of all or a portion of the Companys assets, among other value enhancing opportunities. Ultimately, the Company received two all-stock proposals that offered little premium over CTOs trading value, and both involved substantial risk.
Following the comprehensive process, the CTO Board unanimously concluded that the best way to maximize shareholder value at that time was to continue to pursue the Companys business plan.
CTO HAS THE RIGHT BOARD AND TEAM IN PLACE TO EXECUTE ITS STRATEGY AND DELIVER LONG-TERM VALUE FOR SHAREHOLDERS
CTOs seven highly qualified director nominees were chosen based on their backgrounds, track records, specific experience and expertise. They provide independent oversight and direction, and significant real-estate, accounting and finance expertise. Notably, two of CTOs director nominees were appointed to the Board during this past year. Both of these directors have added significant value and bring significant real estate industry expertise with public companies and REITs. Further, four of CTOs current directors, and three of the director nominees, were recommended to the Board previously by Wintergreen and fully support the Companys strategy.
CTOs director nominees include:
CTOs nominees are experienced, independent and fully capable of executing a plan to deliver sustainable growth and value over time. Importantly, the Boards nominees include three individuals who were previously recommended by Wintergreen, are completely engaged as your representatives, and fully support the Companys strategy. We encourage you to vote FOR a Board that has the diversity of experience necessary to maximize value for shareholders.
VOTE THE WHITE PROXY CARD TODAY
We urge you to protect your investment in CTO by voting the enclosed WHITEproxy card today FOR each of CTOs seven nominees and discarding any materials you may receive from Wintergreen. Please vote each and every WHITE proxy card you receive since you may own CTO shares in multiple accounts.
CTOs definitive proxy materials, this letter and other materials regarding the Boards recommendation for the 2017 Annual Meeting of Shareholders can be found at www.VoteCTO.com .
On behalf of the Board of Directors and management team, we appreciate your continued support.
The Consolidated-Tomoka Board of Directors
If you have any questions or require any assistance with voting your shares,please contact the Companys proxy solicitor listed below:
MacKenzie Partners, Inc.
105 Madison Avenue New York, New York 10016
Call Collect: 212-929-5500 or Toll-Free (800) 322-2885 Email: firstname.lastname@example.org
Consolidated-Tomoka Land Co. is a Florida-based publicly traded real estate company, which owns a portfolio of income investments in diversified markets in the United States including approximately 1.8 million square feet of income properties, as well as approximately 8,200 acres of land in the Daytona Beach area. Visit our website at www.ctlc.com.
We encourage you to review our most recent investor presentations for year end 2016 pertaining to the results for the quarter and year ended December 31, 2016, available on our website at www.ctlc.com.
Certain statements contained in this press release (other than statements of historical fact) are forward-looking statements. Words such as believe, estimate, expect, intend, anticipate, will, could, may, should, plan, potential, predict, forecast, project, and similar expressions and variations thereof are intended to identify certain of such forward-looking statements, which speak only as of the dates on which they were made, although not all forward-looking statements contain such words. Although forward-looking statements are made based upon managements expectations and beliefs concerning future developments and their potential effect upon the Company, a number of factors could cause the Companys actual results to differ materially from those set forth in the forward-looking statements. Such factors may include the completion of 1031 exchange transactions, the availability of investment properties that meet the Companys investment goals and criteria, the modification of terms of certain land sales agreements, uncertainties associated with obtaining required governmental permits and satisfying other closing conditions, as well as the uncertainties and risk factors discussed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2016 as filed with the Securities and Exchange Commission. There can be no assurance that future developments will be in accordance with managements expectations or that the effect of future developments on the Company will be those anticipated by management. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this release.
IMPORTANT ADDITIONAL INFORMATION AND WHERE TO FIND IT
The Company, its directors and certain of its executive officers may be deemed to be participants in the solicitation of proxies from the Companys shareholders in connection with the matters to be considered at the Companys 2017 annual meeting of shareholders to be held on April 26, 2017. On March 21, 2017, the Company filed a definitive proxy statement (the Proxy Statement) with the U.S. Securities and Exchange Commission (the SEC) in connection with the solicitation of proxies from the Companys shareholders for the 2017 annual meeting. INVESTORS AND SHAREHOLDERS ARE STRONGLY ENCOURAGED TO READ THE PROXY STATEMENT AND ACCOMPANYING WHITE PROXY CARD WITH RESPECT TO THE 2017 ANNUAL MEETING, AND OTHER DOCUMENTS FILED WITH THE SEC, CAREFULLY AND IN THEIR ENTIRETY AS THEY WILL CONTAIN IMPORTANT INFORMATION. Shareholders may obtain the Proxy Statement, any amendments or supplements to the Proxy Statement and other documents filed by the Company with the SEC for no charge at the SECs website at www.sec.gov. Copies will also be available at no charge at the Investor Relations section of our corporate website at www.ctlc.com.
1 Calculated from 7/31/2011 until 3/17/2017.
2 Permission to use quotes neither sought nor obtained.
3 See Wintergreen Funds 2016 annual report, http://www.wintergreenfund.com/reports/ar/, at p. 10.
View source version on businesswire.com: http://www.businesswire.com/news/home/20170321005537/en/
Consolidated-Tomoka Land Co. Mark E. Patten, 386-944-5643Sr. Vice President & Chief Financial Officermpatten@ctlc.comFacsimile: 386-274-1223orJoele Frank, Wilkinson Brimmer KatcherJames Golden or Dan Moore, 212-355-4449
Source: Consolidated-Tomoka Land Co.
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