You win. Or maybe not.
Hedge fund Clinton Group said troubled teen retailer Wet Seal agreed to give up four seats on its board — only to reverse course just hours later.
The activist investor, which has been angling for control of the board, said it got a call from Wet Seal’s investment banker on Tuesday, saying the company was ready to concede the seats.
According to Clinton, which gave its version of events in a regulatory filing yesterday, the banker said, “It appears you have won.” The banker — who told Clinton he was authorized to act on the company’s behalf — said the directors, including the chairman, were prepared to resign that day.
But seven hours later, around 10:30 p.m., the banker called back to say that Wet Seal had changed its mind, according to Clinton.
A spokesman for Wet Seal didn’t return a request for comment. But a person close to the company laid the blame on the banker, saying he wasn’t authorized to make the deal. Wet Seal hired Guggenheim Securities and Peter J. Solomon Co. as advisers.
“Yesterday’s actions are another example of the indecisiveness that has hurt stockholders for the past seven years under the leadership of this board,” said Greg Taxin, a Clinton managing director.
Clinton, which has been pushing Wet Seal to put itself up for sale for months, kicked off its battle for board seats in August through a “consent solicitation,” in which shareholders can elect directors without waiting for the annual meeting.
Experts said Wet Seal may have changed its mind when it became aware of a glitch in the voting process.
Some votes may not have been accurately counted, Clinton warned investors yesterday — a situation that could buy Wet Seal more time, according to lawyer Andy Freeman, who specializes in corporate battles.