Exclusive-Impactive Capital may run proxy fight at WEX, seeking 4 of 11 directors, source says
The share price of WEX has slid 30 per cent in the last 52 weeks.
Impactive, which owns roughly 7 per cent of the company and has been a shareholder for four years, is ratcheting up pressure on the payments company only days after its May 15 annual meeting.
WEX, whose services include payment processing and information management for vehicle fleets, employee benefits, business payments, and travel payments, has a market value of roughly $4.5 billion.
Frustration has been simmering for years as Impactive privately pressed WEX to simplify its business and create greater alignment between the company and its shareholders but feels its requests have been dismissed, the source said.
The source was not permitted to discuss the hedge fund's private plans.
Specifically Impactive has urged WEX to consider spinning off its benefits segment and has suggested adding a investor to the 11-member board of directors. Late last year, Impactive asked to join the board but has so far not been invited on, the person said.
A representative for the company was not immediately available for comment.
Despite its strong market positioning, attractive assets and competitive advantages, WEX has underperformed and lagged behind peers, including Corpay, Impactive said earlier this month in a public letter to shareholders.
In an effort to exert pressure, Impactive said on May 2 that it would vote against three directors, including the company's chair, Melissa Smith, and lead director, Jack VanWoerkom, at the May 15 meeting.
While all three were re-elected, shareholders' significant votes "against" the directors signal concern.
Impactive has only run one proxy fight during its seven-year lifetime and said publicly at conferences that it prefers to engage with companies and management privately to fix problems.
Two years ago Impactive settled a proxy fight with Envestnet when the financial technology company added three new directors, including Impactive co-founder Lauren Taylor Wolfe.
But Impactive is eyeing a potential second board challenge by taking on WEX because it worries the company and its advisors are ignoring shareholders' wishes, the source said. It is considering nominating at least four directors because of the board's size, the person said.
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