Irvine-based New Century Financial Corp. on Friday rejected a bid by a hedge fund shareholder to gain three seats on its 10-member board.
New Century said it’s already addressed the concerns of New York-based Greenlight Capital LLC, which said last spring it wasn’t satisfied with the direction of the subprime lender.
Greenlight intends to run its president, David Einhorn, and two other investors for seats on New Century’s board. The hedge fund, which contends New Century is undervalued, owns 10% of the company’s shares.
Greenlight said last year that it didn’t approve of New Century’s conversion to a real estate investment trust in 2004. The conversion was OK’d by 90% of New Century’s shareholders.
“Although we agreed on certain points, we firmly believe our strategy and capital allocation practices offer the best means to maximize stockholder value over the long term,” said Fredric J. Forster, lead independent director of New Century, in a statement.
Shares of New Century have declined amid rising interest rates. They were trading at $40 Friday, off a 52-week high of $54.
“Because we believe that Greenlight’s ultimate goal is to undo the long-term strategy of New Century, the presence of Greenlight’s nominees on our board of directors would not be in the best interest of all stockholders,” Forster said.
