The Forzani Group Ltd./Le Groupe Forzani Ltee

The Forzani Group Ltd./Le Groupe Forzani Ltee

May 14, 2009 07:00 ET

Forzani Group Responds to Crescendo Partners Dissident Proxy Announcement

CALGARY, ALBERTA--(Marketwire - May 14, 2009) - The Forzani Group Ltd. (TSX:FGL) (the "Company", or "FGL") recommends that shareholders oppose plans announced late yesterday by Crescendo Partners to nominate its own slate of two directors for election to FGL's board of directors. Crescendo is a New York-based hedge fund.

"Last month Crescendo informed us that it owned 5.1% of FGL's shares, demanded three seats on our board of directors and threatened a proxy fight if we declined," said John Forzani, Chairman. "As a matter of good governance FGL's board undertook a clear and transparent process to consider Crescendo's demands. Based on a number of factors, the board unanimously determined that the Company and its shareholders would be best served by denying Crescendo's extraordinary demands."

In its discussions with FGL, Crescendo refused to name its proposed directors and failed to provide a compelling rationale to support its demands. Well in advance of Crescendo contacting FGL, the Company had commenced the process of selecting a qualified nominee to replace a retiring director. Pursuant to the Company's governance process, a highly qualified replacement nominee was selected before Crescendo demanded three nominees.

The complete text of a May 1, 2009 letter from John Forzani to Eric Rosenfeld, Managing Member, Crescendo Partners, is provided below for the benefit of FGL shareholders.

Mr. Forzani added, "The Company's board and management intend to remain focused on implementation of the Company's recently announced strategic plan and growth initiatives. We believe that the initiatives we announced at our Investor Day presentation on April 28 have been very positively received by our shareholders and analysts. We will not be distracted by Crescendo's announcement yesterday and intend to move forward with our plan to build value for all shareholders."

Earlier this week FGL mailed a Management Proxy Circular with its slate of eight nominees for the FGL board. The election of directors will take place at the Company's Annual General Meeting on June 10, 2009. A copy of the Management Proxy Circular is available at the Company's profile on SEDAR at

FGL understands that Crescendo has issued its own proxy circular and FGL will respond to it in due course, after having taken the opportunity to review it.

FGL and its board are advised by Greenhill & Co., as independent financial advisors, Blake, Cassels & Graydon LLP, as legal counsel and Georgeson Shareholder Communications Inc., as proxy solicitation agent.

Following is the text of the letter from John Forzani to Eric Rosenfeld.

May 1, 2009

Mr. Eric Rosenfeld
Managing Member
Crescendo Partners II, L.P.
825 - 3 Ave. 40th floor
New York, NY 10022

Dear Eric:

As you know, our Board met earlier today to consider your request. I am
writing to convey the decision of the Board.

Crescendo has told the Company that it owns approximately 5.1% of the
Company's shares and has requested that it be allowed to nominate three
members of a 10 person board of directors by expanding the Board by two new
members and having one of the existing directors resign.

In evaluating your request, the Board considered a number of factors,

1. The Company has an active, engaged and highly-qualified board of
directors with a diverse range of skills, deep industry expertise, an
independent lead director and other corporate governance best practices.
2. The Company has an established corporate governance process for the
nomination of new directors. The process includes reviewing the
composition and size of the Board and assessing the effectiveness of the
Board, including the qualifications and skill set provided by the current
board members and evaluating the experiences and skills brought by
potential new nominees to ensure that those experiences and skills will
support the continuing effectiveness of the Board.
3. The Company is performing well in the face of current economic
4. Management recently presented a long-term strategic plan for the Company,
as reviewed and approved by the Board, that has been well received by
analysts and investors. In this regard, we were pleased to hear from Bob
Sartor that at our Investor Day you and your colleagues were
complimentary of the business strategy.
5. Crescendo was unwilling to provide a compelling rationale to support your
request, and failed to identify any particular business initiatives,
plans or strategies that you or your nominees would bring to the Board or
to the Company.
6. Crescendo was unwilling to identify any other shareholders of the Company
who Crescendo believes share its views or support the demand for Board
7. A number of large shareholders have advised the Company that they would
not support Crescendo's request, and the Board believes that a majority
of our shareholders will support our Board.
8. Crescendo was unwilling to provide the names of the persons who it would
propose be nominated as members of the Board but only stated they would
be qualified.
9. We have spoken to several of the references you provided and, as you
would expect, these individuals were complimentary of you and your
colleagues. We also spoke to other individuals familiar with situations
where Crescendo has had board representation. In no case did any of these
individuals identify differentiating value provided by Crescendo as
compared to other qualified directors.

After giving careful consideration to these and other factors the Board has
unanimously determined that the Company will not grant Crescendo's request.

We trust you will be satisfied with the process we have undertaken and that
you will accept the decision of the Board. At one point in our discussions,
you threatened to launch a proxy fight should your request be declined. We
believe such a move would cause the Company needless distraction and
expense, and that it would ultimately fail. We trust you will reconsider
your position and that you will remain a supportive long-term shareholder of
the Company.

Yours truly,

"John Forzani"

John Forzani,
Chairman of the Board

cc: Al Bellstedt
B. Sartor

About The Forzani Group

The Forzani Group Ltd. is Canada's largest national retailer of sporting goods, offering a comprehensive assortment of brand-name and private-brand products, operating stores from coast to coast, under the following corporate and franchise banners: Sport Chek, Coast Mountain Sports, Sport Mart, National Sports, Athletes World, Sports Experts, Intersport, Econosports, Atmosphere, Tech Shop/Pegasus, Nevada Bob's Golf, Hockey Experts, S3 and Fitness Source. The Company also has websites for several of its corporate and franchise banners, which can be accessed through its main website at

Corporate Website:

This news release contains certain statements that may constitute forward-looking information within the meaning of applicable securities laws. This forward-looking information involves known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such information. Such information involves the use of such words as "may", "will", "expect", "believe", "plan", "intend", "are confident" and other similar terminology. This information reflects current expectations regarding future events and operating performance and speaks only as of the date of this news release. Forward-looking information involves significant risks and uncertainties, should not be read as a guarantee of future performance or results, and will not necessarily be an accurate indication of whether or not such results will be achieved. A number of factors could cause actual results to differ materially from the results discussed in the forward-looking information including, but not limited to, the factors discussed in the Company's Management Discussion and Analysis and Annual Information Form filed with the securities regulatory authorities in Canada, available at Although the forward-looking information in this news release is based upon what management believes are reasonable assumptions, the Company cannot assure actual results will be consistent with this forward-looking information and, therefore, you should not place undue importance on this information. While the Company may elect to do so, it does not undertake to update this forward looking information to reflect new information or circumstances at any particular time.

Contact Information

  • The Forzani Group Ltd.
    Robert Sartor, CA
    Chief Executive Officer
    (403) 717-1342
    The Forzani Group Ltd.
    Michael Lambert, CA
    Chief Financial Officer
    (403) 717-1666