Adaptec chairman says Steel Partners wrong about sale recommendation

By Lisa Kerner

Charlotte, N.C., Oct. 30 - The war of words between Adaptec, Inc. and shareholder Steel Partners II, LP continued on Friday with Adaptec chairman Joseph Kennedy accusing Steel Partners of attempting to "shade the truth" in a news release issued on Thursday.

In its release, Steel Partners commented on Adaptec's financial results for the second quarter of fiscal 2010 and urged shareholders to vote to remove Adaptec chief executive officer S. "Sundi" Sundaresh and legacy director Robert J. Loarie.

Steel Partners pointed to the deterioration of the company's operating performance and said Sundaresh's "so-called" turnaround plan "appears to involve nothing more than the company spending more and more of our money with no returns."

Kennedy denies Steel Partners' claim that an independent financial adviser has called for the sale of the Milpitas, Calif., data storage company's business operations.

"The adviser made no such recommendation, and in fact has yet to present an analysis of the best ways to create value for stockholders," Kennedy said in a news release.

"This misrepresentation typifies Steel's campaign, which has offered up creative distortions in press releases at the expense of presenting a clear vision of prudent strategies to create value for stockholders," Kennedy said.

Kennedy sent a letter to Adaptec shareholders on Wednesday urging them to reject Steel Partners' consent solicitation.

Sundaresh, appointed in 2005, has "successfully sold or shut down unprofitable businesses" and "articulated a vision of leading-edge market opportunities that capitalized on Adaptec's technical excellence," Kennedy said in the letter.

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