Pitney Bowes finds itself under pressure to divest itself of a unit that exclusively powers eBay’s international shipping programs. Hestia Capital went nuclear today with a press release announcing its intention to overhaul Pitney Bowes’ board and accusing the company of engaging in what it called “seemingly bad faith and unethical tactics” and trying to “go behind our back.”
Hestia said it was the third largest stockholder of Pitney Bowes with a beneficial ownership position of approximately 7.1%, but denied it was an activist investor.
Hestia’s Founder and Chief Investment Officer Kurt Wolf said in a letter to shareholders that it had proposed the addition of three new independent directors but accused Pitney Bowes of contacting its proposed candidates “in a seemingly harassing manner.”
An article in Reuters cited “sources” who said Hestia had proposed candidate replacements for Pitney Bowes CEO including former ShippingEasy.com chief Katie May and former Stamps.com CEO Ken McBride.*
In today’s announcement, Hestia’s Wolf described the offer that Pitney Bowes had allegedly refused: “We conveyed that if our two sides could agree on this level of change, Hestia would not seek the immediate removal of any directors, the removal of management, an immediate sale of underperforming assets, Board fees for my service, or reimbursement for any of our costs.”
Reuters reached out to Pitney Bowes spokesperson Bill Hughes who said the company engages regularly and openly with shareholders and said, “Although we remain open to engaging with Hestia, we also look forward to having the discussion about the best path forward with all our shareholders during the 2023 proxy season.”
CNBC had published a contributed piece on Saturday by the founder of a hedge fund who had seen the move coming and said Pitney Bowes’ cross border solutions business had a “single customer concentration risk as eBay is by far its largest customer.”
It’s unknown if eBay knew the pressure its partner was facing when it agreed to continue to use Pitney Bowes’ cross-border logistics services, which the latter announced in a press release on November 2.
eBay is in the process of transitioning sellers from its Global Shipping Program (GSP) to a new program called eBay International Shipping, both powered by Pitney Bowes.
The full Hestia press release is available on BusinessWire.
Update 12/13/2022: Updated to remove the reference to Hestia’s advisors at its request.
Get rid of that blood sucking Wall Street, that WE may finally live on the fruits of OUR labor.
Wall Street is Evil.