Rocky Mountain Chocolate Factory has rejected the director candidate put forth by AB Value Management and Bradley Radoff, despite a prior settlement offer to add her to the board.
On Friday, AB Value and Radoff said they were willing to end their proxy contest at Rocky Mountain in exchange for an agreement to have their sole nominee, Mary Bradley, named to the candy store chain’s board. The same day, Rocky Mountain said it was going to speed up the interview process, signaling Bradley’s addition to the board was only a formality.
However, Monday afternoon Rocky Mountain announced that Bradley would not be joining its board “due to her lack of experience in retail franchise operations and corporate governance.” The company added that during her interview earlier in the day information surfaced that Bradley “has a previously undisclosed, material change in her professional status.”
“We are extremely dismayed that the board attempted to derail an agreed upon settlement,” said the activist in a late Tuesday statement, accusing Rocky Mountain of setting “a new standard for low-road tactics in an election contest.”
The settlement proposal was made earlier in July by the company, but Bradley’s appointment was contingent upon, among other items, an interview. Bradley is a Planet Fitness executive who previously worked at Godiva Chocolatier.
Although it rejected the activist duo’s only nominee, Rocky Mountain did not close the door to a settlement, insisting it was open to a “good faith proposal” from AB Value and Radoff, major shareholders who control a combined 17.6% of the company.
In their response Tuesday evening, AB Value and Radoff said they responded to Rocky Mountain’s request by advancing “a new highly qualified female director candidate with corporate governance acumen, food sector expertise, and franchise experience.”
Rocky Mountain shares rose 4.6% in after-hours trading Tuesday.