San Diego Charlotte Russe Holding said Tuesday that it is urging shareholders to reject a proposal from Allan Karp, a shareholder and owner of private-equity firm KarpReilly Capital Partners, that intends to nominate three candidates for the board of directors at the retailer’s 2009 annual meeting. These nominees are members of KarpReilly.
Charlotte Russe said it believes the nominees are a conflict of interest for the chain.
The company’s board is currently evaluating the chain’s strategic alternatives, including a possible sale of the company, as a means of achieving maximum value for all shareholders. This move was previously announced on Jan. 21, following private-equity firm KarpReilly’s proposal to buy the Charlotte Russe chain in November 2008. Karp later withdrew the proposal.
According to the retailer, giving the KarpReilly Group representation on the board could delay and disrupt the ongoing strategic evaluation. Even though Charlotte Russe is recommending the rejection of nominees, it cannot prevent KarpReilly from participating as a bidder in a sale process.
Charlotte Russe’s 2009 annual meeting is scheduled for April 28. The retailer expects to announce its second-quarter results on April 21.