Stewart Director Makes $3.44 Million on Stock Deal
This article is from the archive of The New York Sun before the launch of its new website in 2022. The Sun has neither altered nor updated such articles but will seek to correct any errors, mis-categorizations or other problems introduced during transfer.
Martha Stewart Living Omnimedia Inc. Director Charles Koppelman has become $3.44 million richer since joining the board in July, thanks primarily to the company’s largest outside shareholder.
That holder, San Francisco-based ValueAct Capital Partners LP, agreed on September 30 to sell 500,000 Class A shares of New York-based Martha Stewart Living to Mr. Koppelman for $10.50 each, according to a filing with the Securities and Exchange Commission. That represented a 33% discount to the $15.70 closing price of Martha Stewart Living shares on that day.
Mr. Koppelman also was able to pay $525,000 in cash on the $5.25 million investment and defer payment of the remainder over three years, the filing shows. George Hamel, a principal at ValueAct, declined to comment when asked why his firm had sold part of its Martha Stewart Living stake to Mr. Koppelman at a loss.
“I think they wanted to have my interests aligned with theirs to help grow the company,” Mr. Koppelman, 64, the chief executive officer of music-production and publishing company CAK Entertainment Inc. in New York, said in an interview.
Martha Stewart Living announced on July 27 that Mr. Koppelman would become an independent director. Jeffrey Ubben, a ValueAct co-founder, stepped down as chairman of Martha Stewart Living on the same day while remaining on the board.
Mr. Koppelman in 2000 replaced Steve Madden as chairman of Steven Madden Ltd. after the footwear designer was arrested and sent to jail for securities fraud. Now, Mr. Koppelman is helping to oversee Martha Stewart Living, whose own founder on October 8 began serving a five-month prison sen tence for obstruction of justice.
Stewart herself proposed that the board hire Mr. Koppelman, whose SBK Records produced albums for the rapper Vanilla Ice and the pop-music trio Wilson Phillips. Forbes Magazine in 1991 estimated Mr. Koppelman’s net worth was almost $100 million, a figure that Mr. Koppelman declined to confirm.
Mr. Koppelman now has $3.4 million more – the value of his Martha Stewart Living shares as of yesterday’s closing price less the purchase price. In addition to the discount, Martha Stewart Living shares have climbed 11% from when he signed the agreement with ValueAct to yesterday’s close.
Shares of Martha Stewart Living fell $1.65 to $17.38 at 4 p.m. in composite trading on the New York Stock Exchange. They have risen 59% since July 27.
