Significant Chicago Bridge & Iron Company N.V. Shareholder, Cohen Capital Management, Calls for Immediate Change in Failed Senior Leadership | Business Wire

BROOKLYN, N.Y.–(BUSINESS WIRE)–Cohen Capital Management (“Cohen Capital”), one of the largest investors

of Chicago Bridge &. Iron Company N.V. (NYSE: CBI) (“CBI” or “the

Company”) with an almost 1% stake in the Company, today issued a letter

to CBI Chairman of the Board, L. Richard Flury, calling out CBI’s dismal

financial performance, utter lack of go-forward strategy.

management’s overall disregard for acting in the best interests of

shareholders. In the letter, Cohen Capital suggests implementing

immediate changes to management, including the termination of presiding

President and CEO Philip K. Asherman, to effect real change for


A copy of the letter follows:

August 24, 2016

Mr. L. Richard Flury
Chicago Bridge &. Iron Company

One CB&I Plaza
2103 Research Forest Drive

Woodlands, TX 77380

Dear Richard,

I'm the principal and managing director of Cohen Capital Management, a

New York family office with investments in both public and private

equity. We hold almost one percent of the common stock of Chicago Bridge

&. Iron Company N.V. (“CBI” or the “Company”). As one of the Company’s

largest shareholders, I must express my deep concerns about the dismal

performance and misguided direction of the Company. On multiple

occasions, my office and I've reached out to senior leadership in an

effort to engage constructively about the present plight and future of

this potentially great company. It appears that the leadership is

dodging me to try to avoid answering very serious shareholder concerns.

I've over twenty years of investment experience with extensive

interests in, among other things, the oil and gas sector and real estate

sector. Cohen Capital pursues long-term investment opportunities in

durable value creation, generally with a 5-10 year investment horizon.

As the leader of the organization, I focus on investments in companies

run by honest, able. Shareholder-friendly management teams who can

create long-term, sustainable value for its owners.

In my career, CBI is the only company where the alarming failures of

management and the Board have compelled me to approach the Board in this

manner. However, the consistent, appalling and dramatic mismanagement of

CBI that's fumbled along destroying shareholder value and shrouding

what should be a strong business has forced me to make my concerns


Absolutely Unacceptable Shareholder Returns

In the past two years, the Company stock price has melted down from a

high of $89.22 reached on April 04, 2014, to $31.91, as of yesterday,

August 23, 2016. In a period of less than two years, the Company has

destroyed over $6 billion in shareholder value. Furthermore, CBI’s total

shareholder returns under a decade of leadership with its President and

Chief Executive Officer, Mr. Phillip K. Asherman, have been an abysmal

17% while the S&P 500 has returned over 116% during the period – a

staggering difference of over 99%.

Clearly Incapable Management

As shareholders know too well, the Company made a regrettable deal to

acquire Shaw Group in 2012 for a reported enterprise value of $2.0

billion and a staggering 7.0x transaction multiple to Shaw’s fiscal 2012

adjusted EBITDA. The Company publicized to shareholders and the market

that the acquisition would give it access to new revenue lines,

additional customers and a broader revenue base. Instead, the

acquisition has been a complete and utter disaster that continues to

cost shareholders to this day.

After the Company’s acquisition of Shaw Group, the Company worked on two

nuclear projects for over three years, without ever being paid for its

work. In addition, the Company continued to tell its shareholders that

eventually it'd receive a payout for all the money owed in arrears.

Facing a resulting cash crunch, the Company was forced to raise billions

of dollars in fresh capital through the debt markets to fund its

operations resulting from the billions in losses sustained from the

nuclear projects. Subsequent to that. The loss of many billions of

dollars in cash flow, the Company decided to sell its nuclear operations

to Westinghouse at another multi-billion dollar loss, with the provision

that it'd eliminate all future liability from these operations for

the Company.

However, the stunning mismanagement of this business continues to haunt

shareholders. Only recently did shareholders learn that Westinghouse is

challenging the premise of its deal with the Company and seeking an

additional two billion dollars. My efforts to understand this complex

and now clearly failed transaction with resulting litigation have been

consistently rebuffed. While I hope the Company can once and for all put

an end to this saga, I've no faith in management or its legal strategy

based on its consistent failed performance.

Appalling Lack of Accountability

Despite nearly a decade of squandering shareholder value on failed

transactions, a lack of strategy and blatant mismanagement there has

been no accountability at the highest levels of CBI.

The Company’s senior leadership has an obligation to take immediate

corrective action to remediate all of these significant issues plaguing

the Company. Indeed, since the Shaw Group acquisition and its ensuing

multi-billion dollar debacle, there has been not one senior leadership

change. It's clear that those fiduciaries charged with overseeing and

managing the Company have a tin ear to – or simply don’t care about –

the strongly held views of the shareholder base that accountability at

the senior management level is needed. That a strategic vision and

accompanying concrete action plan for the future is needed.

For our Company to move forward on the right footing, we demand the

immediate termination of President and CEO Philip K. Asherman, under

whose leadership the wrong-headed acquisition and ensuing problems

occurred. he's lost the confidence of the core constituencies and,

frankly, has an abysmal track record that clearly justifies his removal.

As a result of Mr. Asherman’s abysmal leadership, CBI has underperformed

the market massively over the last 1, 5 and 10 years. During this time,

Mr. Asherman has sold millions in stock while the Company’s true owners,

the shareholders, have suffered. In the last week, he destroyed what

little credibility he'd with shareholders by dumping his personal

stake while the stock traded near multi-year lows.

While markets rallied around the world, Mr. Asherman sold 468,600 of his

own shares last week between $32 and 34 per share. This is right near

CBI’s low share price of $31.30 for the year. After his latest sales, he

is now left with 328,050 shares according to a form 4 filed on August

18, 2016. Shareholders are left with no choice but to see he's no

confidence in the Company and that he believes the share price is headed

even lower.

With a highly qualified, proven leader at the helm, we're confident

that CBI can turn the corner and deliver on its inherent potential to

create shareholder value. It's time for the Board to vigorously tackle

the job at hand. Listen to the concerns of shareholders and make the

significant change so desperately needed.

As a shareholder of CBI, I reserve my right to pursue whatever actions

are necessary, including a potential proxy fight to replace board

members and force this change if the Board is unwilling to act for its

shareholders. I sincerely hope that this action will prove unnecessary

in the coming weeks if positive, concrete steps to change the management

and trajectory of the Company are implemented immediately.


Daniel Cohen


Founded by Daniel Cohen in 1992, Cohen Capital Management, LLC provides

investment advisory services and invests capital on behalf of Cohen’s

family and a limited number of outside investors. The Company offers

investment advice, portfolio management, securities. Other financial

services. The firm manages money both in the United States and abroad

for private families and institutional investors. CCM employs a

research-intensive approach, based solely on rigorous corporate

fundamental analysis to determine undervalued companies and generate

above average returns for our clients over a five to ten year period.