Fermi files consent revocation as former CEO seeks shareholder meeting

(Alliance News) - Fermi Inc on Monday said it has filed a preliminary consent revocation statement in response to a challenge by co-founder and former chief executive officer Toby Neugebauer.

Earlier this month, the real estate investment trust focused on data centres and a power grid development in Texas said it had terminated the contract of co-founder and former CEO Toby Neugebauer due to conduct which violated its terms.

Fermi noted two separate US Securities and Exchange Commission filings made by Neugebauer, amounted to an attempt to take control of the board and company.

On Monday, Fermi said its consent revocation statement responds to Neugebauer's preliminary consent solicitation, in which he is seeking to solicit shareholder consent to hold a special meeting of shareholders at the end of June.

Fermi said Neugebauer is looking to take control of the board in a single election with "hand-picked nominees".

The firm added: "Should he secure control of the board, Neugebauer may fundamentally alter Fermi's strategic direction by forcing a rapid sale at a depressed valuation without the support of a broad base of Fermi shareholders."

In a statement, Fermi said: "The board is committed to evaluating all transactions that could maximize long-term value for shareholders, but it will not be forced into a short-sighted decision that benefits only Neugebauer and his affiliates at the expense of all others who experienced significant losses under his tenure as CEO."

Fermi added that Neugebauer's special meeting solicitation is not in the best interests of the company or its shareholders.

The firm said its 2.0 plan is "delivering tangible results", while Project Matador "continues to advance with clear visibility toward power delivery".

Fermi said it is actively conducting a search for a new "highly qualified" CEO to replace Neugebauer.

The company noted that Neugebauer's record as CEO "raises significant concerns regarding his leadership and ability to execute", as Fermi's stock declined more than 80% from its initial public offering.

"Neugebauer's proposals are designed to force a sale at a price that is far below Fermi's intrinsic value," Fermi added.

"The board and management team believe that an immediate sale would not be in the best interests of shareholders and could result in a value-destructive outcome, primarily benefiting Neugebauer and his affiliates, who received their stock pre-IPO for consideration at less than USD0.01 per share, while locking in substantial losses for Fermi's public shareholders."

Shares in Fermi were down 4.1% at USD6.62 on Monday afternoon in London. The stock has fallen 78% since its initial public offering in October.

By Michael Hennessey, Alliance News reporter

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