HomeStreet in Seattle to face proxy battle from big investor

A war of words between HomeStreet in Seattle and one of its biggest investors has escalated.

Blue Lion Capital disclosed in a Jan. 17 letter to the $6.8 billion-asset HomeStreet’s directors that it plans to nominate multiple people to run for board seats. The move comes a week after HomeStreet rejected a request from Charles Griege Jr., Blue Lion’s managing partner, to join its board.

Blue Lion, which owns about 5.5% of HomeStreet’s stock, has criticized a strategy that largely focuses on mortgages and bank acquisitions. The investor did not identity its nominees, though Griege wrote that the candidates would “be tolerant of alternative perspectives and … fully committed in their efforts to create value for HomeStreet’s shareholders.”

Griege also took aim at a Jan. 11 letter to shareholders where Mark Mason, HomeStreet’s chairman, president and CEO, defended the company’s strategy and stated that making Griege a director “is not in the best interest of all shareholders.”

“The notion that adding one of your largest shareholders to the board would not be ‘in the best interest of all shareholders’ is patently absurd,” Griege wrote in his response. “I suspect the ‘interest’ you have at the forefront of your mind is continuing the unanimity of thought and passive approach to strategy and management oversight that has been the hallmark of your failed tenure.”

HomeStreet said in its letter that it passed on Griege after he completed a questionnaire and interviewed with its recommending committee and lead independent director. Griege, in his response, said he also provided the company with recommendation letters from four “prominent public company bank executives.”

HomeStreet typically holds its annual meeting in late May.