UPDATED: James Mitarotonda Pleased With Dillard's, Barington Agreement

by Lance Turner and Mark Friedman  on Wednesday, Apr. 2, 2008 9:45 am  

Above, Dillard's CEO William Dillard II. Dillard's Inc. of Little Rock has reached an agreement with Barington Capital Group over Barington's efforts to elect four nominees to Dillard's board of directors.

James Mitarotonda, the hedge fund investor who has criticized Dillard's Inc. of Little Rock since last summer, on Wednesday told ArkansasBusiness.com that he's pleased with the agreement his firm reached with the department chain on Tuesday.

Dillard's announced Tuesday after market close that it had reached an agreement with Barington Capital Group and ally Clinton Group Inc. over their efforts to elect four nominees to Dillard's board of directors. The move avoids what had been a looming proxy fight at Dillard's annual meeting May 19.

"The company has added four strong independent directors," Mitarotonda said Wednesday. "It appears to me that the company is committed to taking action to improve shareholder value."

Shares of Dillard's rose on the news, up more than 8 percent by 9:45 a.m.

Per the agreement, one of the four people Barington said it wanted on Dillard's board - Nick White, president and CEO of White & Associates and a former executive vice president and for Wal-Mart Stores Inc. - will be among a new group of four nominees that Dillard's is recommending shareholders elect.

The other nominees are:

  • James A. Haslam, III, CEO of Pilot Travel Centers LLC
  • R. Brad Martin, former chairman and CEO of Saks Inc.
  • Frank R. Mori, Co-CEO and president of Takihyo Inc., former president and CEO of Anne Klein Inc. and former CEO and founding Partner of Donna Karan International

The new slate of nominees does not include Mitarotonda, who was among the four nominees Barington previously said it would nominate to the Dillard's board.

On Wednesday, Mitarotonda said Barington has had "positive discussions" with Dillard's CEO William Dillard II and representatives of the retailer, which "resulted in an outcome that we felt was favorable for all of the shareholders."

For months, Dillard's barely acknowledged the criticism from Barington and Mitarotonda, which Barington laid out in several letters made public in filings with the U.S. Securities and Exchange Commission.

Mitarotonda wouldn't comment Wednesday on what had changed.

Dillard's 'Welcomes' New Insights

According to Dillard's statement, Barington and Clinton "have agreed to cease their efforts to elect a slate of four nominees" to the Dillard's board and "to vote for the election of the company's nominees," according to Barington's statement.



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