Adaptec asks stockholders to reject Steel Partners' bid for control

By Lisa Kerner

Charlotte, N.C., Sept. 29 - Adaptec, Inc. urged its stockholders not to respond to Steel Partners II LP's consent solicitation and to mark the "Yes, Revoke My Consent" boxes on the gold consent revocation card.

Rejecting Steel Partners' proposals "will ensure that Adaptec does not become subject to the whims of a hedge fund that is under pressure from its own investors," Adaptec said in a letter to stockholders.

Steel Partner is seeking to remove Adaptec's chief executive officer, Subramanian Sundaresh, from the board of directors in order to control the seven-member board without paying a premium to other stockholders, said Adaptec.

According to Adaptec, all of Steel Partners' representatives on the Adaptec board voted in favor of the financial plans they now criticize and the 2008 acquisition of Aristos Logic, "which Steel now disingenuously cites as a reason for its actions."

The stockholder also wants to sell Adaptec's operations into a depressed market in "a move that may have more to do with Steel's own pressing financial difficulties than with what is best for all stockholders," the letter said.

Adaptec said in the letter that its efforts to turn around the business are gaining traction.

"Our new-generation products are being well received, we have the financial resources to sustain our turnaround, and we are committed to building and realizing value for the stockholders of Adaptec," the company said.

Steel Partners has an approximately 10% interest in Adaptec, a Milpitas, Calif., data storage company, the company said.

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