Aerojet investors poised to back CEO in board challenge from exec chair

By Svea Herbst-Bayliss

BOSTON, June 29 (Reuters) - Aerojet Rocketdyne shareholders are poised to elect a group of directors headed by the company's chief executive in a bitterly fought election where the company's executive chairman also sought control of the board, people familiar with the matter said on Wednesday.

Chief executive Eileen Drake and Warren Lichtenstein, the executive chairman, each nominated eight director candidates for election to the U.S. rocket maker's board.

The two have been battling each other since the collapse of a planned $4.4 billion merger with Lockheed Martin Corp earlier this year and both have sued each other in Delaware court.

The sources requested anonymity to discuss the likely outcome of the shareholder vote before an official announcement by the company. The meeting is being held on Thursday and investors could still vote or change their votes until the meeting begins.

Representatives for the company and for Lichtenstein could not be reached for comment.

Lichtenstein, whose Steel Partners and affiliates own more than 5% of the company, argued operational improvements and changes to capital allocation were needed to help push up the company's share price to attract new buyers. He also wanted to bring back Mark Tucker, a former Aerojet chief operating officer, as CEO.

But the major proxy advisory firms, ISS and Glass Lewis, recommended investors back Drake's slate and end the current standoff. ISS argued there is not enough evidence to suggest Drake must be replaced and that Lichtenstein should not serve on the board at this point.

Glass Lewis praised Drake for having put together a well-rounded slate of candidates and said the company generally performed during her tenure. (Reporting by Svea Herbst-Bayliss; Editing by Lincoln Feast.)