North State will take up sale resolution
North State Communications will oppose a shareholder’s proposal to study the possibility of the sale of the company that’s been locally owned and operated since its founding 118 years ago as a rural telephone exchange.
A trust that holds a relatively small number of voting shares in North State recently requested that a resolution on the possibility of a sale be taken up at the company’s annual meeting April 3. North State management agreed to place the resolution about the possibility of a sale on the annual meeting agenda, though company management said Monday that they will urge shareholders to vote against the proposal.
“The board of directors and the senior management of the company maintain their position that the interests of the North State shareholders are best served if the company continues its current mode of operations as a stand-alone company under its current ownership structure. As such, the board will recommend to our shareholders to vote against this shareholder proposal,” said Pat Harman, North State’s chairman of the board and chief executive officer.
The resolution states that North State and its board of directors, “with the assistance of independent and experienced financial and legal advisers,” explore the possible sale of the company, according to a copy of a letter provided to The High Point Enterprise by Kent Rowett. He is a North State investor based in California who has pressured management to sell the company.
Rowett is among dissident shareholders who have tried for three years to get North State management to sell the utility, which is one of the nation’s 15 largest telecommunication companies. They argue that North State is undervalued under its current ownership and management and could bring shareholders greater value if sold to another company or utility.
“The proposal provides an important opportunity for shareholders of North State to demonstrate directly to the company their agreement with us that the time for action is now,” Rowett writes in a letter to North State shareholders dated Feb. 18.
North State indicates in a statement to the Enterprise that holders of voting shares of North State common stock will receive the company’s official proxy statement soon in the mail. The proxy permits them to cast their vote on resolutions and other matters at the annual meeting.
North State’s service area includes High Point, Thomasville, Archdale, Randleman, Jamestown, Trinity, Greensboro and Kernersville. The company is among the 20 largest employers in the city of High Point, according to the High Point Economic Development Corp.
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