The influential advisory firm, which initially opposed the acquisition, just circulated a report urging investors to support it when they vote on November 15.
But it still opposes a golden parachute, up for an advisory vote, that would pay CEO David Passman $8.5 million. It’s “not warranted,” ISS says, in part because it includes grants made less than a month before the sale agreement and performance awards to be “deemed earned at target without rationale.”
AMC raised its offer to $33.06 a share in cash and stock, up from $30.00 in cash, in July as investors appeared ready to reject the original bid. The new terms include $585 million in cash and $250 million in AMC’s Class A common stock.
ISS likes both the “overall boost” in the bid, as well as the fact that it includes “meaningful” equity — giving Carmike investors an opportunity to benefit if AMC grows.
The firm also notes that Carmike’s prospects as a standalone company have weakened over the last few months. That “could represent a downside risk…if the deal is not approved.”
In August, Dreihaus Capital Management, which owns about 10% of Carmike, said it would begrudgingly support the new offer. It lacked confidence in the company’s future “given management’s focus on selling the company rather than growing it.”