Sun-Times Media Group Dissidents Tie Proxy Endorsement Tally With RiskMetrics Nod

Fitz: Activist hedge fund Davidson Kempner Capital Management won a big endorsement Monday in its proxy war to unseat all but one director at Sun-Times Media Group.

RiskMetrics Group-ISS Governance Services, perhaps the best-known proxy advisory firm, is recommending that shareholders vote for Davidson Kempner’s nominees to the board, which includes former Dallas Morning News president and American Consolidated Media founder Jeremy Halbreich.

Another big proxy advisory firm, Glass Lewis & Co., in December backed  Sun-Times Media Group’s current directors, and urged shareholders to reject the Davidson Kempner bid.

Davidson Kempner accuses the current leadership, including turnaround CEO Cyrus F. Freidheim of having no real plan to reverse the Chicago Sun-Times parent’s penny-stock share price, dwindling ad revenue and cash burn rate. For its part, the current directors say they’re cutting costs aggressively. It’s Davidson Kempner that has no plan, they contend – never failing to mention in proxy materials that the hedge fund’s nominees have not made any public statements since the battle began. A STMG spokesperson had no comment on the RiskMetrics endorsement.

Davidson Kempner has until Jan. 26 to convince a majority of shareholders to vote in its nominees. The group has the support of another very big shareholder, K Capital Management.