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Shamrock Activist Value Fund, a fund of Burbank, Calif.-based Shamrock Holdings Inc., has nominated three board directors in the upcoming shareholder vote on Oct. 22.
TXI said private settlement talks with Shamrock had borne no fruit.
"We are certainly disappointed with Shamrock's lack of interest in a cooperative agreement," said Mel Brekhus, chief executive of TXI, the largest cement producer in Texas and a major cement producer in California.
TXI has been hit hard by the economic recession and collapse in construction. Shamrock has alleged that poor management decisions and weak board oversight have caused the company to perform worse than similar companies.
Shamrock has won support from two of TXI's largest shareholders, including Egyptian billionaire Nassef Sawiris. Also supporting Shamrock are proxy advisory firms Proxy Governance Inc. and RiskMetrics Group.
"The long-term financial and operational performance of the company, as well as the prevalence of several shareholder unfriendly governance provisions, establish the need for change," RiskMetrics said.
Dennis Johnson, managing director of Shamrock Capital Advisors, the investment advisor for the Shamrock Activist Value Fund, said change was needed at TXI.
"We are gratified that both RiskMetrics and Proxy Governance independently came to the same conclusion that we have: it's time to change the status quo at Texas Industries," he said.
But TXI argued that Shamrock's proposals are not in the best interest of the company's shareholders.
"The company believes that Shamrock's demands -- which go beyond its public proposals -- are unreasonable, result in benefits to Shamrock far out of proportion to Shamrock's interest in TXI and, most importantly, are not in the best interest of all of TXI's stockholders," the company said.
"As part of its discussions with Shamrock, TXI has offered to welcome all of Shamrock's nominees to its board and to include them on the specific board committees requested by Shamrock," TXI added. "In addition, TXI offered to fully consider Shamrock's requests for changes in the company bylaws."
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