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FEATURE angry shareholders, overcompensated h TAKEOVERostile I By Kelly Harris Falling stocks, boards: Will the 2009 proxy season be a curtain call for the "Greed is Good" speech? n the summer of 2008, the board of Ottawa-based chipmaker Zarlink Semiconductor Inc. was the target of a hostile takeover bid launched by a group of concerned share- holders. What was once considered a jewel of Silicon Valley north, Zarlink had seen the business for its prime industry — semiconductors for telephone sys- tems, amongst other uses — plummet, and taking a once-soaring stock to unan- ticipated lows. In October 2000, Zarlink stock was valued at $35 a share. This past summer those same shares hovered around 80 cents. Enter the Leckie Group — three shareholders headed by Toronto fi nan- cier Scott Leckie. They amassed nearly six per cent of Zarlink stock and stood as the second largest single shareholder. Its ammunition in the battle included an underperforming stock and a board, that despite various growth plans and announcements, had been unable to af- fect shares in a positive manner. Veteran proxy solicitation insiders say that from the outside this one looked like a win for the dissident group. "We had it nailed that this was going to be a slam dunk and obviously it wasn't," says Glenn Keeling, Laurel Hill Advisory Group partner. The veteran proxy solici- tor says he believes the diffi culty from the dissident group is they hired a solicitation fi rm that had no cross-border reach. Others believe the dissident group ran headlong into a proactive board of direc- tors that was in regular communication with shareholders, promoting where the company was, and was going. Zarlink's in-house counsel Don McIntyre headed a team that included the proxy solicita- tion fi rm Georgeson to work with share- holders. C ANADIAN Lawyer INHOUSE DECEMBER 2008 17