LOS ANGELES, July 16, 2013 /PRNewswire/ -- Alex Meruelo
and Meruelo Investment Partners LLC today issued the following
statement regarding Digital Generation, Inc. (Nasdaq: DGIT) ("DG,"
"Company"):
Alex Meruelo, Meruelo Investment
Partners LLC together with related entities ("Meruelo") are the
largest stockholders of DG with beneficial ownership exceeding 14%.
Recently, the DG board of directors (the "Board") announced certain
corporate governance changes along with the date of the Company's
2013 annual stockholder meeting. With a strong commitment to DG,
and an unwavering focus on maximizing value for all stockholders,
Meruelo strongly urges the Board to take further actions to improve
the performance of the Company through changes to the composition
of the Board, and to implement further corporate governance
changes.
Pushed by our previous actions, two independent directors were
added at the 2012 annual stockholders meeting. And, as a
result of our continued pressure, the Board now proposes to
institute an independent chair, and a delayed process to declassify
the Board over a two year period following the 2013 annual
meeting.
However, Meruelo does not believe that these steps are enough to
address the urgent problems which significantly disadvantage DG's
performance.
As Meruelo has shared in numerous discussions with the Board and
management in the last several months, Meruelo believes that the
composition of the Board continues to be a primary cause of DG's
underperformance. Certain members of the Board were
responsible for approving excessive compensation for DG's executive
chair, and adopting a poorly run (and ultimately failed) strategic
review process that disrupted DG's business and
operations.
The Board continues to represent a reputational hazard for the
Company, continues to take actions that undermine the operational
and strategic plans that management seeks to implement, and has
failed to address the significant short position in this stock.
In the face of further downward pressures on the stock price,
Meruelo recently increased its ownership to help support the stock,
and requested that the Board enable it to increase ownership by
another 10%, while maintaining full rights as a stockholder.
Despite Meruelo's willingness to agree to a support agreement that
would have protected stockholders, the Board rejected this
request.
Ultimately, Meruelo strongly urges the Board to take further
action in regards to the Board composition, and to implement
further corporate governance changes. Furthermore, Meruelo supports
the Board in pushing the executive chair to voluntarily resign in
all employment capacities, effective immediately. Finally,
Meruelo fully supports the chief executive officer and the
management team as they execute on strategies that will
significantly improve DG and stockholder value.
With further changes to the Board, Meruelo is confident that
DG's performance will improve significantly. DG's management
can then be free to take appropriate actions to improve DG's
performance and position DG to maximize value for all stockholders
whether through organic growth, a sale of the Company or other
strategic alternatives.
Meruelo is considering all of its options to ensure that the
actions it suggests are taken, including but not limited to
nominating independent directors for election to the Board, and
other corporate governance changes.
About the Meruelo Parties
Meruelo Investment Partners LLC acts as an investment adviser or
manager to other persons and accounts and may be deemed to
beneficially own securities owned or held by or for the account or
benefit of such persons and accounts. The principal business of
Meruelo Investment Partners is serving as an investment adviser or
manager to other persons and accounts.
Alex Meruelo is the Chief
Executive Officer of Meruelo Investment Partners and may be deemed
to control, and beneficially own securities owned or held by,
Meruelo Investment Partners. The present principal occupation of
Mr. Meruelo is serving as the principal of the Meruelo Group, which
includes affiliated companies with significant interests in real
estate management and development, utility construction,
hospitality and gaming, food services (manufacturing, distribution
and restaurant operations), banking and other financial services,
and television broadcast media.
About any Possible Proxy Solicitation
Although Meruelo is not currently soliciting proxies for any
annual or special meeting of stockholders of the Company, Meruelo
reserve the right to do so. If Meruelo elects to solicit proxies in
the future, Meruelo will file a proxy statement and other
soliciting materials with the SEC and advise security holders to
read the materials (when they become available) because they will
contain important information. Security holders will be able to
obtain any such materials (when they become available) for free at
the SEC's web site at http://www.sec.gov or from us using the
contact information provided herein or in such materials.
Forward-Looking Statements
This press release contains forward-looking statements that are
subject to factors that could cause actual results to differ
materially from expected results, including assumptions that may
not be correct or accurate due to risks related to the Company and
other parties, circumstances, and conditions Meruelo cannot control
or predict, the inherent uncertainty of future events, and other
factors that may cause Meruelo to change its plans.
SOURCE Meruelo Investment Partners LLC
