UNITED STATES
SECURITIES AND EXCHANGE
COMMISSION
Washington, D.C.
20549
SCHEDULE 14A
(Rule
14a-101)
INFORMATION
REQUIRED IN PROXY STATEMENT
SCHEDULE
14A INFORMATION
Proxy
Statement Pursuant to Section 14(a) of the Securities Exchange Act of
1934
(Amendment
No. )
Filed by
the Registrant ¨
Filed by
a Party other than the Registrant x
Check the
appropriate box:
¨ Preliminary
Proxy Statement
¨ Confidential,
for Use of the Commission Only (as permitted by Rule14a-6(e)(2))
¨ Definitive
Proxy Statement
x Definitive
Additional Materials
o Soliciting
Material Under Rule 14a-12
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COHEN
& STEERS SELECT UTILITY FUND, INC.
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(Name
of Registrant as Specified in Its Charter)
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WESTERN
INVESTMENT LLC
WESTERN
INVESTMENT HEDGED PARTNERS L.P.
WESTERN
INVESTMENT ACTIVISM PARTNERS LLC
WESTERN
INVESTMENT TOTAL RETURN PARTNERS L.P.
WESTERN
INVESTMENT TOTAL RETURN FUND LTD.
ARTHUR
D. LIPSON
WILLIAM
J. ROBERTS
MATTHEW
S. CROUSE
LYNN D. SCHULTZ
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(Name
of Persons(s) Filing Proxy Statement, if Other Than the
Registrant)
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Western
Investment LLC (“Western Investment”), together with the other participants
named herein, is filing materials contained in this Schedule 14A with the
Securities and Exchange Commission (the “SEC”) in connection with the
solicitation of proxies for the election of three nominees as directors at the
2008 annual meeting of stockholders (the “Annual Meeting”) of Cohen & Steers
Select Utility Fund, Inc. (the “Fund”). Western Investment has filed
a proxy statement with the SEC with regard to the Annual Meeting.
Item 1:
On March 6, 2008, Western Investment mailed the following letter to holders of
the Common Stock of the Fund:
WESTERN
INVESTMENT LLC
Dear
Fellow Stockholder,
Western
Investment LLC together with its affiliates (collectively “Western” or “we”)
owns over 7% of the outstanding shares of Cohen & Steers Select Utility Fund
(“UTF” or the “Fund”). Western is UTF’s largest
stockholder. We are seeking your support for the election of our
three nominees to the Board of Directors of the Fund (the “Board”) at the Fund’s
upcoming Annual Meeting scheduled for April 1, 2008. We believe that
the election of directors with a meaningful ownership interest in the Fund, with
no affiliation with other funds in the Cohen & Steers fund family, is
required for pressing stockholder concerns to be adequately
addressed.
WE
BELIEVE IT IS IMPERATIVE THAT UTF’S BOARD TAKE ALL ACTIONS TO MAXIMIZE VALUE FOR
THE FUND’S STOCKHOLDERS. FOR THIS REASON, WESTERN BELIEVES THAT IT IS
CRUCIAL THAT THE WESTERN NOMINEES BE ELECTED SO THAT UTF’S BOARD INCLUDES
DIRECTORS WHO HAVE NO TIES TO THE OTHER COHEN & STEERS’ FUNDS. WE
BELIEVE THAT TRULY INDEPENDENT DIRECTORS WOULD HAVE LONG AGO AGGRESSIVELY ACTED
TO REDUCE THE FUND’S DOUBLE DIGIT DISCOUNT TO NAV THROUGH ACCRETIVE STOCK
BUYBACK PURCHASES.
In our
opinion, the primary duty of the Fund’s Board is to maximize the value of the
stockholders’ investment in the Fund. We believe that the current
directors of the Fund have not only failed in this duty but have in fact taken
recent actions which run counter to both the interests of the Fund’s
stockholders and the current best-practice standards of corporate
governance. We believe that the current outside directors of the
Fund, who each serve on the boards of and receive six-figure annual fees for
serving on a total of 21 other funds in the Cohen & Steers fund complex, are
conflicted and cannot properly and effectively serve the Fund’s
stockholders. We wonder, in light of their six-figure annual fees
from the boards of other Cohen & Steers funds, can the outside directors be
trusted to take the actions necessary to ensure UTF’s stockholders receive the
maximum value for their investment in the Fund?
Furthermore,
UTF’s two “interested” directors, Mr. Cohen and Mr. Steers, who also serve as
officers of the Fund and as Co-Chairmen and CEOs of Cohen & Steers Capital
Management, Inc. (“Cohen & Steers”), the manager of the Fund, have interests
which appear to conflict with those of the Fund’s stockholders. We
wonder, given their ownership position with Cohen & Steers (which, we note,
collects fees based on the total assets of the Fund under management), how
willing Mr. Cohen and Mr. Steers are to take actions that might reduce the
discount to net asset value (“NAV”) of the Fund or otherwise benefit
stockholders, such as share repurchases when the NAV discount is large, if such
actions also reduce the fees that Cohen & Steers collects?
STOCKHOLDERS
NEED TRULY INDEPENDENT DIRECTORS WHO ARE FOCUSED ON MAXIMIZING STOCKHOLDER
VALUE
YOU CAN ELECT THEM USING THE
ENCLOSED GREEN PROXY CARD
As Cohen
& Steers is responsible for the six digit directors’ fees that the current
outside directors each collect for serving on the boards of other funds in the
Cohen & Steers complex and for the salaries of Mr. Cohen and Mr. Steers, we
believe it exerts considerable influence on the current Board. What
other explanation is there for the fact that the Board has failed to address the
double-digit discount to NAV that Fund stockholders have been forced to bear
almost since the Fund’s inception? Or for the decidedly stockholder-unfriendly
governance actions taken by the Board and presented to stockholders like a lump
of coal on the day after Christmas?
In our
view, the primary purpose of these newly imposed stockholder restrictions is to
insulate a Board heavily influenced by the Fund’s manager from accountability to
the stockholders they were elected to serve. NONE OF THESE MEASURES,
IN OUR OPINION, ADDS VALUE TO YOUR INVESTMENT IN THE FUND. THEY
SIMPLY MAKE IT EASIER FOR THE BOARD TO REMAIN IN OFFICE AND TO ALLOW COHEN &
STEERS TO PERPETUATE ITS PROFITABLE FRANCHISE.
WHY
HAVE ACCRETIVE STOCK BUYBACKS NOT BEEN MADE?
As a UTF
stockholder, Western is extremely concerned about the Board’s failure to have
made accretive stock buyback purchases at all times when the Fund was at an
excessive NAV discount and the effect of this failure on stockholder
value. This is particularly disturbing in light of the current
liquidity crisis in the Fund’s auction rate preferred shares. Western
believes it would have been clearly beneficial to the Fund to buy back common
stock at a discount, and then to redeem some of the Fund’s preferred
shares. These actions would have provided several benefits: (i) stock
buybacks would have been accretive to common stockholders; (ii) redemption of
some preferred shares would have created liquidity for preferred shareholders;
and (iii) the likely reduction of the discount to NAV - A TRIPLE
WIN.
For
example, if the Fund had consistently repurchased shares at a 3% or greater
discount to NAV, UTF’s NAV today would be 21.57% higher.1 Specifically,
that means that NAV per share on February 22, 2008 would be $32.09 rather than
the current $26.40. This would have the effect of increasing earnings
per share substantially, definitely far in excess of the insignificantly higher
per share expenses that would have resulted from the stock
buyback. As UTF’s largest stockholder, Western is outraged by this
lost value, and believes it is inexcusable.
Western
does not understand why this strategy has not been implemented. Of
course these actions would reduce the Fund’s net assets, thereby reducing the
management fees paid to Cohen & Steers, the Fund’s manager.
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1
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Assumes
that the Fund consistently repurchased shares representing 20% of the
trading volume for weeks when the stock traded at a 3% or greater
discount. If this accretive share repurchase plan had been done
since the Fund’s inception, the weighted average buyback discount to NAV
would have been 13%.
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Overall
we believe the Board’s actions, or more appropriately, inaction, is symptomatic
of its indifference to the plight of UTF’s stockholders. As an
example of just how dismal UTF’s NAV discount has been, of the 655 publicly
traded U.S. domiciled closed-end funds currently registered with the Securities
and Exchange Commission, during the period from January 14, 2005 through July
20, 2007, the Fund ranked in the worst 1% for 36% of the weeks and in the bottom
10% for 100% of the weeks, as illustrated in the chart below. In
fact, Western believes any recent improvement is attributable to Western’s
recent purchases of the Fund’s shares.
As a
stockholder we feel this goes beyond unacceptable. Given such
circumstances, we believe that there is ample evidence that the Board has not
been properly looking after stockholders’ best interests or earned the premium
charged to stockholders, who, in turn, have not seen a justification for either
the premium they paid as part of their initial investment or their recurring
management fees.
STOCKHOLDERS
NEED DIRECTORS WHO ARE FOCUSED ON THEIR BEST INTERESTS AND NOT THE INTERESTS OF
THE FUND’S MANAGER
Our
nominees represent the largest ownership interest in the Fund. Their
object and intent is clearly aligned with yours – to ensure that stockholders
receive the maximum value for their investment. If elected, the
Western nominees pledge to work with the other members of the Board to try to
reduce the discount to NAV and improve performance. With your
support, with your votes at this meeting, with your mandate, they can be what
the Fund currently lacks: an active, effective and engaged stockholder voice in
the boardroom. Vote your shares today on the GREEN
proxy. Give yourselves that voice.
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Sincerely,
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| /s/ Arthur D. Lipson |
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Arthur
D. Lipson
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Western
Investment LLC
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IF
YOU HAVE ALREADY RETURNED A WHITE PROXY TO THE
FUND’S
MANAGEMENT, EITHER DIRECTLY OR OVER THE PHONE
OR
INTERNET, YOU
HAVE EVERY RIGHT TO CHANGE YOUR VOTE.
IF
YOU HAVE ANY QUESTIONS ABOUT
HOW
TO VOTE YOUR GREEN WESTERN INVESTMENT PROXY,
PLEASE
CONTACT THE FIRM ASSISTING US IN THIS SOLICITATION:
INNISFREE
M&A INCORPORATED
TOLL-FREE
AT: (877) 687-1873
BANKS
AND BROKERS PLEASE CALL COLLECT:
212-750-5833
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