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Saddle Point launches proxy contest at defense company Curtiss-Wright -Breaking

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© Reuters.

By Svea Herbst-Bayliss

BOSTON (Reuters) – Saddle Point, an investment firm, has appointed four members to Curtiss-Wright’s (NYSE:) Corp’s board. The company believes its stock is too undervalued due to its lack of a strategic focus, and that its earnings power is diluted by the noncore industrials, which should be sold.

On Wednesday, the company made public its nominations through a regulatory filing.

The New York-based firm, which owns approximately 0.3% of the Davidson, North Carolina-headquartered maker of defense and intelligence programs, has been engaged with the company since 2020 and in discussions with the board for months. The company is valued at $5.8billion and indicated that it wasn’t looking to replace 10 directors, but had experts who could guide the company more effectively, according to people familiar with the discussion.

Roy Katzovicz (ex-Pershing Square Capital Management Partner) declined to speak for Saddle Point.

Saddle Point includes financial industry professionals and experts from the national defense sector.

Ellen Lord, the former CEO at Textron Inc Textron Systems subsidiary (NYSE:), also served as first U.S.-based undersecretary of defence for acquisition and maintenance.

Christine Fox served as acting secretary of defense, and was also the director, cost assessment, and program evaluation for the department, between 2009 and 2013. She had previously worked for decades at the Center for Naval Analyses, where she became president.

Rajender Kumar Chandhok served as chief investment officer. Northrop Grumman Corp (NYSE:)’s pension system while Peter Carlin worked at investment firm Blue Harbor Group, LP, which helped catalyze the separation of BWXT Technologies from Babcock & Wilcox in 2015.

Curtiss Wright said that Lord and Fox would not “bring to the Board strengths that will increase the knowledge and qualifications of the already represented.” It also asked Saddle Point not to withdraw its nominations, and to return to constructive dialog.

Saddle Point was nominated by other activists, Starboard Value (NASDAQ:) and Jana Partners, at Mercury Systems (NASDAQ :). As investors shifted away from tech-oriented companies and war in Ukraine, defense sector stocks have gained momentum.

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