Specialty retailer The Wet Seal Inc. (NASDAQ: WTSLA) announced this morning that it had reached an agreement with private equity firm Clinton Group that resulted in four of the retailer's directors resigning from the company's board.
The Clinton Group had initiated a consent solicitation effort with Wet Seal's shareholders, a kind of proxy proposal that does not require a shareholder meeting. A Clinton Group executive told Bloomberg that it had counted votes totaling more than 60% of outstanding shares supporting removal of board members.
Clinton Group owns about 6.9% of Wet Seal's common stock and four of its nominees have been added to Wet Seal's board. Three of Wet Seal's directors will remain.
In exchange, Clinton Group has agreed "that it shall immediately cease, and cause its affiliates to cease, any and all solicitation efforts in connection with the consent solicitation and shall not vote, deliver or otherwise use any consents that may have been received to date pursuant to the consent solicitation." Wet Seal will also reimburse Clinton Group up to $250,000 for expenses incurred in the consent solicitation.
Wet Seal's stock is up 0.5% at $3.15 in a 52-week range of $2.42 to $4.63.