“We disagree, and we believe that the facts clearly indicate that the company’s attempt at transformation has failed: Argo has continued to underperform its peers and the relevant indices since every point in early 2020 that could reasonably mark the beginning of a supposed transformation.”
The fund, which in 2021 urged Argo’s board to consider the prospect of selling the business, is of the strong view that the underwriter’s roster of directors must immediately be augmented and reconstituted. Capital Returns has put forward two director candidates, whose nomination prompted the aforementioned release by Argo.
“It is worth noting that the company never once used the term ‘strategic repositioning’ in any public communication during 2020,” Capital Returns went on to declare, “when the supposed transformation was initiated. In our view, Argo is belatedly attempting to create an appearance of progress and strategic change in order to convince shareholders that further board refreshment is unnecessary.
“We will not be fooled by Argo’s attempts to rewrite the past. The current board has been given ample opportunity to create value at Argo, and the claimed ‘strategic repositioning’ in 2020 has resulted in further destruction of shareholder value. We believe that the board must be urgently enhanced if Argo is to reach its potential.”
It added: “We call upon the company to hold its annual meeting in early May, in keeping with its historical practice, so that shareholders can have the opportunity to elect new directors without delay. We also caution the company against any unilateral and late-stage board refreshment; such tactical manoeuvres will only serve to confirm our view that this board, as currently comprised, is more interested in self-preservation than in rebuilding trust with shareholders.”
As of this writing, Argo has not issued a public response to the activist shareholder’s assertions. The insurer’s annual general meeting has not yet been announced either.