Furniture Brands to shareholders: side with us, ignore Sun Capital

Furniture Brands International Inc., the Clayton-based importer and manufacturer, today fired back at its No. 2 shareholder, a private investment group that is running a proxy fight to gain a presence on the company’s board. The parent company of Lane, Broyhill and Thomasville accused Sun Capital Partners of “attempting to mislead stockholders.”

Earlier this year, Sun Capital of Boca Raton, Fla. expressed interested in buying Furniture Brands. The private investment group did not publicly name an offer price, but Furniture Brands today said Sun executives had verbally indicated that they would be interested in buying the company at a preliminary price range of $13 to $15 a share. (Friday’s closing price was $13.12; the stock’s average over the previous 52 weeks is $12.15).

A written offer has not emerged, W.G. “Mickey” Holliman, Furniture Brands’ chairman and Ralph Scozzafava, chief executive, told shareholders in a letter today.

“Sun Capital appears to be unhappy that your Board rejected this attempt to capture value that belongs to our stockholders,” Holliman and Scozzafava wrote. ”Simply put, Sun Capital’s agenda is not your agenda.”

The letter raised what Holliman and Scozzafava called a “troubling issue:” Sun Capital’s demand for access to ”proprietary records” for its due diligence. The letter said Sun Capital has “significant” ownership positions in several furniture manufacturers and retailers that compete directly with Furniture Brands.

“Granting Sun Capital access to highly confidential information concerning Furniture Brands’ strategy and operations, including through having their nominees on our Board, could impair our competitive position,” the letter said.

Furniture Brands also accused Sun Capital executives of raising “the spectre of the existence of acquisition proposals that the Board has not reviewed.”

“Their assertions are wrong, and they are attempting to mislead stockholders,” Scozzafava and Holliman wrote.