PICO HOLDINGS: Sean Leder Requests Special Meeting for May 10

As originally appeared in Troubled Company Reporter.
PICO Holdings, Inc. (Nasdaq:PICO), based in La Jolla, Calif., is a diversified holding company reporting recurring losses since 2008. PICO owns 57% of UCP, Inc. (NYSE:UCP), 100% of Vidler Water Company, Inc., a securities portfolio and various interests in small businesses. PICO has $676 million in assets and $431 million in shareholder equity. Central Square Management LLC and River Road Asset Management LLC collectively own more than 14% of PICO and have agitated for governance and financial changes. Sean Leder owns 1% of PICO shares and seeks shareholder authorization to call a Special Meeting to remove and replace five directors. Other activists at http://ReformPICONow.com/ have taken to the Internet to advance the shareholder cause.
Leder Holdings, LLC announced that it has received written requests from holders of more than 10% of common stock of PICO to call a special meeting on May 10, 2016. At the Special Meeting, Leder Holdings will seek to:
(1) amend the Company’s Bylaws to elect of Directors at a Special Meeting of shareholders without prior Board authorization;
(2) remove current Directors Carlos C. Campbell, John R.
Hart, Michael J. Machado and Kenneth J. Slepicka; and
(3) to elect the highly-qualified Director nominees proposed by Leder Holdings.
“At the Special Meeting we will be calling upon the Company’s long-suffering investors to support our platform that we believe will reverse the trend of underperformance and lack of management accountability at the Company,” Mr. Leder says.
Leder Holdings will nominate the following four individuals to the PICO Board of Directors:
(1) Sean M. Leder is the Chief Executive Officer of Leder Holdings, LLC, Chief Executive Officer of The Leder Group and President of Leder Realty & Management, Inc. He has over 22 years of real estate investment experience. For the past year and a half, PICO has been Mr. Leder’s primary focus. He has applied his real estate experience to understanding the supply and demand dynamics of the Vidler water business and the UCP homebuilding business. Leder Holdings expects that the relationships that Mr. Leder has formed and the insights that he has gained in the course of his investigations of the Company’s businesses will drive the Leder Holdings platform to restore shareholder value.
(2) Timothy E. Brog is the President of Locksmith Capital. He has extensive management, investment, financial and legal experience as the chairman of the board and chief executive officer of Peerless Systems Corporation, managing director of Locksmith Capital Management LLC, president of Pembridge Capital Management LLC and the managing director of The Edward Andrews Group Inc. In the course of these experiences, Mr. Brog has removed and replaced underperforming management, implemented cost containment measures and directed operational turnarounds. Mr. Brog has experience in turnaround situations, reducing excess selling, general and administrative expenses, evaluating investment opportunities and making value oriented investment decisions.
(3) Alan Dash is a senior vice president of Starwood Energy Group, responsible for transaction origination, execution and asset management activities, with an emphasis on utility-scale renewable energy projects in North America. Mr. Dash has been active in the water markets throughout his career. As an investment banker, he led the advisory and restructuring of the largest privately owned water utility in Florida. He has been a member of diligence and investment teams regarding water and wastewater technology, as well as water recovery. Mr. Dash has also performed diligence regarding water resources in the western USA due to the nexus of water, energy and power production.
(4) Joel Lusman is the managing member of Lusman Capital
Management. He served on the board of Maxim Power Corporation from March 2012 through June 2014 where he was on the audit and risk committee and led the strategic review committee. Mr. Lusman has over 17 years of portfolio management experience and brings an owner’s perspective and prior experience to optimizing complex resource situations and real estate investments.
The Leder Nominees will take these steps to restore shareholder value: — Sell PICO’s 56.9% interest in UCP;
— Monetization of individual Vidler water assets;
— Monetize PICO’s potpourri of other investments;
— Reduce Selling, General and Administrative expenses;
— Return value to shareholders through special dividends, self-tenders or share repurchase programs;
— Utilize the Company’s net operating loss carryforwards;
— Declassify the Board; and
— Remove John Hart, PICO’s CEO.
The activist bloggers at www.reformpiconow.com are ecstatic. Mr. Leder’s objectives read like “a PICO shareholder wish list.” With a promise to investigate all nominees, the bloggers are optimistic for now. They also warn readers that PICO will not sit still. PICO is expected to launch an extensive and costly public relations campaign, that will intensify as the Special Meeting date draws closer.
The bloggers conclude: “March 15, 2016 is a bright day for PICO shareholders. Good is in the process of defeating evil. For the first time in over 5 years, the future of PICO looks bright.”