NEW YORK, Dec. 12, 2025 — Scully Royalty Ltd. (NYSE: SRL) issued an update today on its upcoming annual general meeting scheduled for Dec. 27, 2025, after activist investor MILFAM LLC filed a dissenting proxy circular on Dec. 8, 2025 seeking to nominate five directors to the company’s board.
The dissenting filing follows MILFAM’s notice to Scully Royalty that it intends to put forward its own slate of directors at the meeting. Under the company’s advance‑notice provisions, any shareholder who wishes to nominate directors must comply with strict timing and formatting requirements. Scully Royalty has informed MILFAM that its nominations do not meet those requirements and therefore will not be considered at the meeting.
Despite the company’s rebuke, MILFAM proceeded to file the proxy circular, which the company describes as an “unnecessary disruption” aimed at sowing confusion among shareholders. MILFAM has also lodged an application with the Grand Court of the Cayman Islands seeking a judicial declaration that its notice was valid—a request Scully Royalty is actively contesting.
Because MILFAM’s proxy and accompanying “gold” proxy are deemed invalid, any votes cast for its five director candidates will be ineffective. The only individuals eligible for election are the management nominees listed in Scully Royalty’s proxy statement dated Nov. 28, 2025, which is publicly available through the SEC’s filing system. The company urges shareholders to review the proxy statement and vote for the management slate.
Shareholders who have already voted using the gold proxy remain eligible to submit a new vote using the “white” proxy for the management candidates.
Market and Governance Implications
The proxy battle underscores the tension that can arise when activist investors challenge incumbent management in the resource‑royalty sector. Scully Royalty’s reliance on its advance‑notice rules reflects a broader industry trend: companies are tightening governance procedures to protect board composition from ad‑hoc nominations that could dilute strategic focus.
From a valuation perspective, unresolved proxy disputes can introduce short‑term volatility. Analysts monitoring SRL’s stock have noted that the company’s price has traded within a narrow range since the filing, but a prolonged legal contest in the Cayman courts could heighten uncertainty and potentially depress liquidity.
Should the Cayman court rule in favor of MILFAM, the decision could set a precedent for how strictly corporate proxy rules are enforced across jurisdictions that rely on English‑common‑law principles. Conversely, a favorable ruling for Scully Royalty would reinforce the enforceability of internal governance deadlines, giving boards greater certainty when planning annual meetings.
Technical Outlook for Royalty Structures
Scully Royalty’s business model hinges on long‑term contracts that deliver a fixed percentage of production revenue from oil and gas assets. This predictable cash‑flow profile is attractive to income‑oriented investors, but it also places a premium on board stability and expertise in commodity price risk management. Management’s slate includes seasoned executives with deep experience in upstream economics, which is critical to navigating the upcoming cycle of price volatility expected in 2025‑2026.
The proxy dispute does not alter the underlying asset base—a portfolio of over 30 royalty interests spanning the United States and Canada, generating combined annual net cash flow of approximately $150 million. The company’s recent capital allocation plan, outlined in the November proxy statement, targets a 6‑7% annual dividend yield and incremental organic growth through strategic acquisition of high‑margin royalties in emerging basins.
What Shareholders Should Do
- Review the SEC‑filed proxy statement to confirm the list of eligible directors.
- Use the “white” proxy to cast votes for the management nominees.
- Monitor legal filings in the Cayman Islands for any updates that could affect voting eligibility.
- Consider the impact of board composition on the company’s ability to execute its dividend and growth strategy.
Overall, the outcome of this proxy contest will provide a clear signal about Scully Royalty’s governance trajectory and its capacity to maintain a stable dividend payout in a fluctuating energy market.
Original article, Author: Jam. If you wish to reprint this article, please indicate the source:https://aicnbc.com/14485.html
