The bruising battle for boardroom control at Aberdeen International Inc. ended with a dramatic 11th-hour retreat Monday night when activist Ryan Morris withdrew his dissident slate of directors and apologized for criticizing the company's chairman Stan Bharti.
"The shareholders have spoken," Mr. Morris said in an interview. "I was pretty blown away by how many long-term loyal shareholders there were in support of management."
Aberdeen did not disclose the results of advance voting ahead of a special shareholder meeting set for Tuesday, but it issued a statement Monday night announcing significant shareholder support for its current board. Mr. Morris's withdrawal prompted the company to cancel the Feb. 3 shareholder meeting.
Mr. Morris' abrupt concession ends a heated two-month campaign to change boardroom practices that saw insiders, including chairman Stan Bharti and his family-owned company Forbes & Manhattan, paid rich consulting fees, salaries and other benefits in recent years as losses mounted at the struggling junior mining investment company.
In a joint statement released Monday night by the activist and Aberdeen, Mr. Morris took the unusual step of recanting his complaints about Mr. Bharti and the board's governance practices.
"At the outset of this contest I expressed concerns that Mr. Bharti was not acting in the best interests of the companies in which Forbes & Manhattan has an interest. Having initiated this process and seeing that the majority of the shareholders voted in his favour, I realize that I was wrong. I unreservedly apologize for the prior comments I have made that called into question Mr. Bharti's integrity," Mr. Morris said in the statement.
Mr. Morris' activist campaign was backed by British fund manager Nightscape Capital. The two shareholders held 9 per cent of Aberdeen's shares. The company's officers and affiliated companies control at least one-quarter of the company's outstanding shares.
Mr. Morris and Nightscape have agreed to a five-year standstill limiting future challenges. They have also agreed to withdraw a court application seeking to reverse a private stock sale and other potential transactions at the company.
Mr. Morris's withdrawal followed a personal meeting with Mr. Bharti. In a statement Mr. Bharti said he was "pleased" to discuss "issues of concern" raised by shareholders.
"My door is always open. As the results of shareholder proxy voting demonstrate, I believe we have a good plan to deliver value to our shareholders in these difficult times. We will now focus on executing on our plan," Mr. Bharti said.
The peace accord marks the end of a rancorous contest involving unusually personal attacks on both sides. Two influential proxy service companies recommended Mr. Morris replace Mr. Bharti as a director because of concerns about his close ties to Forbes & Manhattan, which receives payments for managing and advising Aberdeen. The proxy firms recommended against replacing all directors with candidates backed by Mr. Morris because of concerns that such a sweeping change would destabilize the company.
The Aberdeen proxy battle marks the third time in three years that companies affiliated with Mr. Bharti, a Toronto mining financier, have been targeted in proxy battles by disgruntled shareholders.