Regent and Riley sign a truce


Major shareholder Riley Investment Management has signed an agreement with Regent Communications not to mount any proxy fight through the end of this year. Veteran board member John Wyant has moved up to Chairman, with William Sutter resigning under pressure from Riley.

According to an SEC filing, Riley principal John Ahn, a Regent director and member of the board’s nominating and corporate governance committee, had threatened to mount a proxy fight unless the board agreed to remove Sutter as chairman and not nominate him for re-election to the board. Although the majority of the committee had originally supported nominating Sutter for re-election, the committee eventually decided “it was in the best interests of Regent and its stockholders not to do so” because of the threatened proxy fight. “The Committee believed that it was more important for Regent to maintain its focus on operations and strategic considerations in light of the difficult industry, market and economic conditions currently existing and that it would be detrimental to Regent to incur the distraction and expense that a proxy fight would entail,” the filing stated.

“I think I was effective in opposing some of their objectives. They saw me as an obstacle that they wanted to get rid of,” Sutter told RBR/TVBR. He said he believed he had been effective in blocking some self-serving proposals from Riley which were, in his opinion, not in the long-term best interests of Regent shareholders. Activist shareholders, such as the Riley hedge fund, do not have long-term objectives, Sutter said. He resigned, both as Chairman and a director, effective with the implementation of the standstill agreement between Regent Communications and Riley Investment Management.

Ahn did not return a phone call from RBR/TVBR seeking comment.

Under the standstill agreement, all six remaining directors will be nominated for re-election, including the two Riley designees, Ahn and John DeLorenzo (CFO of Entravision). The others are Wyant, Regent President & CEO Bill Stakelin, Andrew L. Lewis IV and Timothy M. Mooney.

Since a previous agreement in September 2007 put two Riley designees on the Regent board, the hedge fund has continued to buy shares of the radio company. Riley now owns about 12% of Regent’s stock, making it the company’s largest shareholder. Wyant’s Blue Chip Ventures is next, with 10.4%.

RBR/TVBR observation: It seems long ago and far away that Riley acquired its stake in Regent and began pressing for the company to sell off its entire portfolio of stations. As depressed as the market for radio properties was then, it is much worse now. But Riley has continued to buy Regent stock, so it apparently believes there will be a recovery and an eventual pay-off.