Thunderbird Entertainment and Houston fund Voss Capital’s board dispute continues as the organizations refute each other’s claims over the proxy battle and the viability of their respective strategies.

The Vancouver-based prodco issued a lengthy statement on Thursday (Nov. 17) to “address false statements led by hedge fund Voss Capital” and confirm its annual general meeting (AGM) will take place in the first quarter of 2023, following its initial postponement.

“Contrary to assertions by Voss, Thunderbird is executing on its strategic plan and is creating long-term value. Thunderbird believes this proxy fight is a waste of time, energy and resources. It risks putting in jeopardy all of the hard work and success that the Company has achieved,” read the statement.

Thunderbird said Voss “opted to initiate an ambush proxy fight” on Nov. 4 when it announced a slate of nominees to replace the current board of directors amid a disagreement on the company’s “strategic direction.” Voss has publicly stated it has no qualms with the company’s management, but has alleged that the board of directors has not done enough to unlock Thunderbird’s value.

Voss issued a response on Friday (Nov. 18) to the allegation of an ambush proxy fight, claiming it was “in compliance” with the Thunderbird’s advance notice provision to nominate a new director to the board.

The fund has criticized the long-term strategy of Thunderbird’s board of directors, claiming that it would be better for the company to be acquired than to continue to acquire smaller studios. Thunderbird is the parent company of unscripted prodco Great Pacific Media (GPM) and animation studio Atomic Cartoons.

Voss has further alleged that Thunderbird has ignored communications from the fund and avoided “being held accountable” to shareholders. The fund stated that its proposed board members – Heather Conway, Asha Daniere, Shannon Valliant, Mark Trachuk, Peggy Hwan Hebard and Taylor Henderson – would begin a strategic review of the company, if elected.

Thunderbird claims that it “had extensive communication in good faith” with Voss, and previously requested that the fund provide the names of its board nominees for consideration. The company alleges Voss’s move to replace the board is “akin to a takeover.” The fund has a minority stake in Thunderbird, holding 13.3% of outstanding shares.

The move prompted Thunderbird to postpone its Dec. 6 AGM to 2023 to give the company time to “thoroughly research and report on the credentials, including the specific work and public company board experience and track record, of each of the individuals nominated by Voss.”

Voss alleged that the postponement is “unjustified and an attempt to impede shareholders’ right to vote,” and said it has proposed Dec. 28 as a new AGM date.

Thunderbird has secured law firm Cassels Brock & Blackwell as legal advisor, corporate strategy firm Morrow Sodali as a “proxy solicitor and strategic advisor,” as well as the firm Longview Communications and Public Affairs as communications advisor, according to the statement.

Strategy and M&A claims

Thunderbird alleges that Voss “has no plan” when it comes to the board takeover and that a strategic review would be “value destructive,” creating instability and uncertainty for the company, which may ” disrupt Thunderbird’s ability to win new business and recruit and retain talent.”

The company also claims that Voss’s strategy to sell Thunderbird “cannot unlock value.” The prospect of a sale is “limited” by the “current market environment” as well as the small pool of potential buyers in Canada, and the need for government approval for an acquisition from a non-Canadian company.

“Such approval is by no means certain and could be subject to time consuming and expensive undertakings, which again would restrict both the pool of interested parties and the premium available for Thunderbird shareholders,” read the statement.

Voss denied the latter claim, countering that Hasbro’s recently announced plan to sell Entertainment One’s film and TV business was prompted by a “wave of unsolicited inbound interest from potential buyers.”

Fiscal 2023 report

Thunderbird CEO Jennifer Twiner McCarron said she is “committed to leading the Thunderbird team to create meaningful content” during a call with investors on Thursday, hours ahead of the statement issue. She said her focus is on continuing to run “healthy operations” and that the company works for “all shareholders equally.”

Among the company’s most recent releases are GPM’s scripted series Reginald the Vampire (pictured) for Syfy and lifestyle series Styled for HGTV Canada.

The call followed the release of Thunderbird’s Q1 2023 financials, where the company reported a 25% increase in revenue from the same quarter in fiscal 2022, coming to $43.7 million compared to $35.1 million. It also reported an increase in free cash flow, with a 29% increase at $4.4 million in Q1 2023 compared to $3.3 million in the same quarter in 2022.