The following constitutes the Schedule 13D filed by the undersigned (the “Schedule 13D”).
Item 1. | Security and Issuer. |
This statement relates to shares of the Common Stock, par value $0.01 per share (the “Shares”), of DWS Dreman Value Income Edge Fund, Inc. (the “Issuer”). The address of the principal executive offices of the Issuer is 345 Park Avenue, New York, NY 10154-0004.
Item 2. | Identity and Background. |
(a) This statement is filed by Western Investment LLC, a Delaware limited liability company (“WILLC”), Western Investment Hedged Partners L.P., a Delaware limited partnership (“WIHP”), Western Investment Total Return Partners L.P., a Delaware limited partnership (“WITRP”), Western Investment Total Return Fund Ltd., a Cayman Islands corporation (“WITRL”), Arthur D. Lipson (together with WILLC, WIHP, WITRP and WITRL, the “Western Entities”), Robert H. Daniels, Gregory R. Dube and William J. Roberts. Each of the foregoing is referred to as a “Reporting Person” and collectively as the “Reporting Persons.”
WILLC has sole voting and investment power over WIHP’s, WITRP’s and WITRL’s security holdings and Mr. Lipson, in his role as the managing member of WILLC, controls WILLC’s voting and investment decisions.
Each of the Reporting Persons is party to that certain Joint Filing and Solicitation Agreement as further described in Item 6. Accordingly, the Reporting Persons are hereby filing a joint Schedule 13D.
(b) The principal business address of each of WILLC, WIHP, WITRP and Mr. Lipson is 7050 S. Union Park Center, Suite 590, Midvale, Utah 84047. The principal business address of WITRL is c/o dms Management, P.O. Box 31910, dms House, 20 Genesis Close, Grand Cayman KY1-1208, Cayman Islands. The officers and directors of WITRL and their principal occupations and business addresses are set forth on Schedule A and incorporated by reference in this Item 2.
The principal business address of Mr. Daniels is 1685 Eighth Avenue, San Francisco, California 94122.
The principal business address of Mr. Dube is 873 East Saddle River Road, Ho-Ho-Kus, New Jersey 07423.
The principal business address of Mr. Roberts is c/o The Atlantic Philanthropies (USA) Inc., 125 Park Avenue, 21st Floor, New York, New York 10017.
(c) The principal business of WILLC is acting as the investment manager of WITRL and the general partner of each of WIHP and WITRP. The principal occupation of Mr. Lipson is acting as managing member of WILLC. The principal business of each of WIHP, WITRP and WITRL is acquiring, holding and disposing of investments in various companies.
The principal occupation of Mr. Daniels is Emeritus Professor of Accounting at San Francisco State University and attorney.
The principal occupation of Mr. Dube is serving as Chairman of Roseheart Associates.
The principal occupation of Mr. Roberts is serving as the Director of U.S. Advocacy for the Atlantic Philanthropies (USA) Inc.
(d) No Reporting Person, nor any person listed on Schedule A annexed hereto, has, during the last five years, been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors).
(e) No Reporting Person, nor any person listed on Schedule A annexed hereto, has, during the last five years, been party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.
(f) Messrs. Lipson, Daniels, Dube and Roberts are citizens of the United States of America.
Item 3. | Source and Amount of Funds or Other Consideration. |
The aggregate purchase price of the 1,672,904 Shares beneficially owned by WILLC is approximately $19,746,079. The Shares beneficially owned by WILLC consist of 500 Shares that were acquired with WILLC’s working capital, 718,495 Shares that were acquired with WIHP’s working capital, 715,822 Shares that were acquired with WITRP’s working capital and 238,087 Shares that were acquired with WITRL’s working capital.
The aggregate purchase price of the 600 Shares beneficially owned by Mr. Daniels is approximately $17,596. The Shares beneficially owned by Mr. Daniels were acquired with personal funds.
Item 4. | Purpose of Transaction. |
The Reporting Persons purchased the Shares based on the Reporting Persons’ belief that the Shares, when purchased, were significantly undervalued and represented an attractive investment opportunity. Depending upon overall market conditions, other investment opportunities available to the Reporting Persons, and the availability of Shares at prices that would make the purchase of additional Shares desirable, the Reporting Persons may endeavor to increase their position in the Issuer through, among other things, the purchase of Shares on the open market or in private transactions or otherwise, on such terms and at such times as the Reporting Persons may deem advisable.
No Reporting Person has any present plan or proposal which would relate to or result in any of the matters set forth in subparagraphs (a) - (j) of Item 4 of Schedule 13D except as set forth in this Schedule 13D or such as would occur upon completion of any of the actions discussed herein. The Reporting Persons intend to review their investment in the Issuer on a continuing basis and engage in discussions with management, the Board of the Issuer and other shareholders of the Issuer concerning the business, operations and future plans of the Issuer. The Reporting Persons are concerned by the persistent discount to net asset value at which the Shares have been trading and believe that the Issuer should take appropriate action to cause the discount to net asset value to be eliminated or reduced. Depending on various factors including, without limitation, the Issuer’s financial position and investment strategy, the price levels and/or discount to net asset value of the Shares, conditions in the securities markets and general economic and industry conditions, the Reporting Persons may in the future take such actions with respect to their investment in the Issuer as they deem appropriate including, without limitation, making proposals concerning, among other things, changes to the capitalization, ownership structure or operations of the Issuer or replacement of the Issuer’s investment manager with an investment manager that is concerned with the discount to net asset value at which the Shares have been trading and that will take action to eliminate or reduce such discount, purchasing additional Shares, engaging in short selling of or any hedging or similar transaction with respect to the Shares or changing their intention with respect to any and all matters referred to in Item 4.
WILLC is seeking representation on the Issuer’s Board of Directors (the “Board”). On December 17, 2009, WILLC delivered a letter to the Corporate Secretary of the Issuer nominating Robert H. Daniels, Gregory R. Dube, Arthur D. Lipson and William J. Roberts to be elected to the Board at the 2010 annual meeting of shareholders of the Issuer, or any other meeting of shareholders held in lieu thereof, and any adjournments, postponements, reschedulings or continuations thereof (the “2010 Annual Meeting”).
On December 17, 2009, WILLC also delivered a letter to the Corporate Secretary of the Issuer submitting, pursuant to Rule 14a-8 of the Securities Exchange Act of 1934, as amended, a proposal for inclusion in the Issuer’s proxy for the 2010 Annual Meeting and to be voted on at the 2010 Annual Meeting (the “14a-8 Proposal”). WILLC is proposing that the Board take the necessary steps to declassify the Board so that all directors are elected on an annual basis. Such declassification shall be completed in a manner that does not affect the unexpired terms of the previously elected directors.
Item 5. | Interest in Securities of the Issuer. |
(a) The aggregate percentage of Shares reported owned by each person named herein is based upon 25,800,109 Shares outstanding, which is the total number of Shares outstanding as of September 30, 2009, as reported in the Issuer’s Certified Shareholder Report of Registered Management Investment Companies on Form N-CSR, filed with the Securities and Exchange Commission on December 3, 2009.
As of the date hereof, WIHP, WITRP and WITRL beneficially own 718,495, 715,822 and 238,087 Shares, respectively, constituting approximately 2.8%, 2.8% and less than 1%, respectively, of the Shares outstanding.
As the investment manager of WITRL and the general partner of each of WIHP and WITRP, WILLC may be deemed to beneficially own the 1,672,404 Shares owned in the aggregate by WIHP, WITRP and WITRL, constituting approximately 6.5% of the Shares outstanding, in addition to the 500 Shares it holds directly.
As the managing member of WILLC, Mr. Lipson may be deemed to beneficially own the 1,672,904 Shares beneficially owned by WILLC, constituting approximately 6.5% of the Shares outstanding. As members of a group for the purposes of Rule 13d-5(b)(1) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), the Western Entities may be deemed to beneficially own the 600 Shares owned by the other Reporting Persons. The Western Entities disclaim beneficial ownership of such Shares.
As of the date hereof, Mr. Daniels directly owns 600 Shares. As a member of a “group” for the purposes of Rule 13d-5(b)(1) of the Exchange Act, Mr. Daniels may be deemed to beneficially own the 1,672,904 Shares beneficially owned in the aggregate by the other Reporting Persons. Mr. Daniels disclaims beneficial ownership of such Shares.
Mr. Dube does not own directly any Shares. As a member of a “group” for the purposes of Rule 13d-5(b)(1) of the Exchange Act, Mr. Dube may be deemed to beneficially own the 1,673,504 Shares beneficially owned in the aggregate by the other Reporting Persons. Mr. Dube disclaims beneficial ownership of such Shares.
Mr. Roberts does not own directly any Shares. As a member of a “group” for the purposes of Rule 13d-5(b)(1) of the Exchange Act, Mr. Roberts may be deemed to beneficially own the 1,673,504 Shares beneficially owned in the aggregate by the other Reporting Persons. Mr. Roberts disclaims beneficial ownership of such Shares.
(b) Each of WILLC and Mr. Lipson is deemed to have sole voting and dispositive power over the Shares reported as beneficially owned by the Western Entities by virtue of their respective positions as described in Item 2.
Mr. Daniels has sole voting and dispositive power over the Shares directly owned by him.
(c) Schedule B annexed hereto lists all transactions in securities of the Issuer during the past sixty days by the Reporting Persons. All of such transactions were effected in the open market, unless otherwise noted.
(d) No person other than the Reporting Persons is known to have the right to receive, or the power to direct the receipt of dividends from, or proceeds from the sale of, the Shares.
(e) Not applicable.
Item 6. | Contracts, Arrangements, Understandings or Relationships With Respect to Securities of the Issuer. |
On January 8, 2010, WILLC, WIHP, WITRP, WITRL and Messrs. Lipson, Daniels, Dube and Roberts entered into a Joint Filing and Solicitation Agreement (the “Joint Filing and Solicitation Agreement”) in which, among other things, (a) the parties agreed to the joint filing and solicitation on behalf of each of them of statements on Schedule 13D with respect to the securities of the Issuer to the extent required under applicable securities laws and (b) the parties agreed to form the group for the purpose of soliciting proxies or written consents for the election of the persons nominated by WILLC to the Issuer’s Board at the 2010 Annual Meeting and for soliciting stockholder support for the 14a-8 Proposal and for the purpose of taking all other actions incidental to the foregoing (the “Solicitation”). The Joint Filing and Solicitation Agreement is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
Pursuant to letter agreements, WILLC has agreed to indemnify Messrs. Daniels, Dube and Roberts against any and all claims of any nature arising from the Solicitation and any related transactions. A form of the indemnification letter agreement is attached hereto as Exhibit 99.2 and is incorporated herein by reference.
The Reporting Persons may, from time to time, enter into and dispose of cash-settled equity swaps or other similar derivative transactions with one or more counterparties that are based upon the value of the Shares, which transactions may be significant in amount. The profit, loss and/or return on such additional contracts may be wholly or partially dependent on the market value of the Shares, the relative value of such shares in comparison to one or more other financial instruments, indexes or securities, a basket or group of securities in which such shares may be included, or a combination of any of the foregoing. The Reporting Persons may also, from time to time, enter into stock loan agreements with one or more counterparties in the ordinary course of business pursuant to which the Reporting Persons may lend their Shares subject to recall at their discretion.
Other than as otherwise described herein, there are no contracts, arrangements, understandings or relationships among the Reporting Persons, or between the Reporting Persons and any other person, with respect to the securities of the Issuer.
Item 7. | Material to be Filed as Exhibits. |
| 99.1 | Joint Filing and Solicitation Agreement by and among Western Investment LLC, Western Investment Hedged Partners L.P., Western Investment Total Return Partners L.P., Western Investment Total Return Fund Ltd., Arthur D. Lipson, Robert H. Daniels, Gregory R. Dube and William J. Roberts dated January 8, 2010. |
| 99.2 | Form of Indemnification Agreement. |
SIGNATURES
After reasonable inquiry and to the best of his knowledge and belief, each of the undersigned certifies that the information set forth in this statement is true, complete and correct.
Dated: January 8, 2010 | WESTERN INVESTMENT LLC |
| | |
| By: | |
| | Name: | Arthur D. Lipson |
| | Title: | Managing Member |
| WESTERN INVESTMENT HEDGED PARTNERS L.P. |
| | |
| By: | Western Investment LLC |
| | General Partner |
| | |
| By: | |
| | Name: | Arthur D. Lipson |
| | Title: | Managing Member |
| WESTERN INVESTMENT TOTAL RETURN PARTNERS L.P. |
| | |
| By: | Western Investment LLC |
| | General Partner |
| | |
| By: | |
| | Name: | Arthur D. Lipson |
| | Title: | Managing Member |
| WESTERN INVESTMENT TOTAL RETURN FUND LTD. |
| | |
| By: | Western Investment LLC |
| | Investment Manager |
| | |
| By: | |
| | Name: | Arthur D. Lipson |
| | Title: | Managing Member |
| |
| ARTHUR D. LIPSON As Attorney-In-Fact for Robert H. Daniels, Gregory R. Dube and William J. Roberts |
SCHEDULE A
Directors and Officers of Western Investment Total Return Fund Ltd.
Name and Position | | Principal Occupation | | Principal Business Address | | Citizenship |
| | | | | | |
Don M. Seymour Director | | Businessperson dms Management Ltd. | | dms Management P.O. Box 31910 dms House, 20 Genesis Close, Grand Cayman KY1-1208, Cayman Islands | | Cayman Islands |
| | | | | | |
David Bree Director | | Businessperson dms Management Ltd. | | dms Management P.O. Box 31910 dms House, 20 Genesis Close, Grand Cayman KY1-1208, Cayman Islands | | Cayman Islands |
| | | | | | |
J.D. Clark & Co. Secretary | | Trust Company | | 2225 Washington Blvd. Ogden, Utah 84401 | | United States |
SCHEDULE B
Transactions in the Shares During the Past 60 Days
Date of Purchase | Shares of Common Stock Purchased | Price Per Share ($) |
WESTERN INVESTMENT HEDGED PARTNERS L.P.
11/10/2009 | 2,500 | | 11.0777 |
11/11/2009 | 5,000 | | 11.1425 |
11/13/2009 | 1,300 | | 11.0088 |
11/19/2009 | 17,500 | | 11.1497 |
11/19/2009 | 1,800 | | 11.1499 |
11/20/2009 | 19,900 | | 11.1228 |
11/20/2009 | 12,000 | | 11.1243 |
11/24/2009 | 44,600 | | 11.3150 |
11/24/2009 | 2,800 | | 11.3220 |
11/25/2009 | 5,500 | | 11.3693 |
11/25/2009 | 1,700 | | 11.3726 |
11/27/2009 | 1,300 | | 11.1112 |
11/27/2009 | 8,000 | | 11.2204 |
11/30/2009 | 31,400 | | 11.3918 |
11/30/2009 | 7,000 | | 11.4130 |
12/1/2009 | 76,400 | | 11.4105 |
12/1/2009 | 2,200 | | 11.4106 |
12/2/2009 | 39,500 | | 11.3924 |
12/2/2009 | 3,800 | | 11.4029 |
12/3/2009 | 3,900 | | 11.4642 |
12/3/2009 | 7,100 | | 11.4586 |
12/4/2009 | 8,917 | | 11.4754 |
12/4/2009 | 49,583 | | 11.4604 |
12/7/2009 | 1,300 | | 11.4189 |
12/7/2009 | 20,000 | | 11.4719 |
12/8/2009 | 3,300 | | 11.4488 |
12/8/2009 | 31,300 | | 11.4504 |
12/9/2009 | 19,300 | | 11.4447 |
12/9/2009 | 2,800 | | 11.4557 |
12/10/2009 | 300 | | 11.5325 |
12/10/2009 | 1,100 | | 11.5753 |
12/14/2009 | 600 | | 11.6785 |
12/14/2009 | 3,800 | | 11.6513 |
12/15/2009 | 6,025 | | 11.6387 |
12/15/2009 | 6,000 | | 11.6320 |
12/16/2009 | 100 | | 11.7025 |
12/16/2009 | 1,150 | | 11.7038 |
12/17/2009 | 200 | | 11.6325 |
12/17/2009 | 10,139 | | 11.7163 |
12/18/2009 | 800 | | 11.6850 |
12/18/2009 | 4,100 | | 11.6911 |
12/18/2009 | 4,360 | | 11.7060 |
12/21/2009 | 10,300 | | 11.7175 |
12/21/2009 | 11,200 | | 11.7148 |
12/22/2009 | 4,100 | | 11.7635 |
12/22/2009 | 7,200 | | 11.7683 |
12/23/2009 | 8,600 | | 11.8413 |
12/23/2009 | 5,800 | | 11.8484 |
12/23/2009 | 963 | | 11.8427 |
12/24/2009 | 486 | | 11.8994 |
12/24/2009 | 1,100 | | 11.9243 |
12/28/2009 | 5,500 | | 11.9485 |
12/28/2009 | 1,500 | | 11.9437 |
12/29/2009 | 3,100 | | 11.9576 |
12/29/2009 | 4,300 | | 11.9537 |
12/30/2009 | 13,000 | | 11.9977 |
12/30/2009 | 16,400 | | 11.9790 |
12/30/2009 | 1,000 | | 11.9950 |
12/31/2009 | 3,900 | | 12.0344 |
12/31/2009 | 5,500 | | 12.0282 |
1/4/2010 | 7,500 | | 12.1777 |
1/4/2010 | 18,100 | | 12.1916 |
1/5/2010 | 3,100 | | 12.2831 |
1/5/2010 | 22,400 | | 12.2756 |
WESTERN INVESTMENT TOTAL RETURN PARTNERS L.P.
11/10/2009 | 2,500 | | 11.0777 |
11/11/2009 | 5,000 | | 11.1425 |
11/13/2009 | 1,388 | | 11.0088 |
11/19/2009 | 17,370 | | 11.1497 |
11/19/2009 | 1,900 | | 11.1499 |
11/20/2009 | 19,900 | | 11.1228 |
11/20/2009 | 12,000 | | 11.1243 |
11/24/2009 | 44,600 | | 11.3150 |
11/24/2009 | 2,800 | | 11.3220 |
11/25/2009 | 5,600 | | 11.3693 |
11/25/2009 | 1,675 | | 11.3726 |
11/27/2009 | 1,300 | | 11.1112 |
11/27/2009 | 7,900 | | 11.2204 |
11/30/2009 | 31,400 | | 11.3918 |
11/30/2009 | 6,934 | | 11.4130 |
12/1/2009 | 76,500 | | 11.4105 |
12/1/2009 | 2,178 | | 11.4106 |
12/2/2009 | 39,400 | | 11.3924 |
12/2/2009 | 3,800 | | 11.4029 |
12/3/2009 | 4,000 | | 11.4642 |
12/3/2009 | 7,100 | | 11.4586 |
12/4/2009 | 8,900 | | 11.4754 |
12/4/2009 | 49,517 | | 11.4604 |
12/7/2009 | 1,300 | | 11.4189 |
12/7/2009 | 20,000 | | 11.4719 |
12/8/2009 | 3,400 | | 11.4488 |
12/8/2009 | 31,100 | | 11.4504 |
12/9/2009 | 19,400 | | 11.4447 |
12/9/2009 | 2,756 | | 11.4557 |
12/10/2009 | 300 | | 11.5325 |
12/10/2009 | 1,100 | | 11.5753 |
12/14/2009 | 600 | | 11.6785 |
12/14/2009 | 3,700 | | 11.6514 |
12/15/2009 | 6,100 | | 11.6387 |
12/15/2009 | 5,900 | | 11.6320 |
12/16/2009 | 1,200 | | 11.7038 |
12/17/2009 | 200 | | 11.6325 |
12/17/2009 | 10,139 | | 11.7163 |
12/18/2009 | 800 | | 11.6850 |
12/18/2009 | 4,041 | | 11.6911 |
12/18/2009 | 4,359 | | 11.7060 |
12/21/2009 | 10,265 | | 11.7175 |
12/21/2009 | 11,200 | | 11.7148 |
12/22/2009 | 4,100 | | 11.7635 |
12/22/2009 | 7,182 | | 11.7683 |
12/23/2009 | 8,575 | | 11.8413 |
12/23/2009 | 5,800 | | 11.8484 |
12/24/2009 | 500 | | 11.8994 |
12/24/2009 | 1,100 | | 11.9243 |
12/28/2009 | 5,400 | | 11.9485 |
12/28/2009 | 1,600 | | 11.9437 |
12/29/2009 | 3,200 | | 11.9576 |
12/29/2009 | 4,100 | | 11.9537 |
12/30/2009 | 12,997 | | 11.9977 |
12/30/2009 | 16,400 | | 11.9790 |
12/31/2009 | 3,935 | | 12.0344 |
12/31/2009 | 5,500 | | 12.0282 |
1/4/2010 | 7,400 | | 12.1777 |
1/4/2010 | 18,200 | | 12.1916 |
1/5/2010 | 3,150 | | 12.2831 |
1/5/2010 | 22,400 | | 12.2756 |
WESTERN INVESTMENT TOTAL RETURN FUND LTD.
11/12/2009 | | | 11.0441 |
1/6/2010 | 66,700 | | 12.4536 |
1/6/2010 | 14,506 | | 12.4398 |
1/6/2010 | 8,409 | | 12.4739 |
1/7/2010 | 3,800 | | 12.5071 |
1/7/2010 | 8,800 | | 12.5853 |
1/7/2010 | 81,927 | | 12.5897 |
1/8/2010 | 41,500 | | 12.7702 |
1/8/2010 | 800 | | 12.6735 |
WESTERN INVESTMENT LLC
None
ARTHUR D. LIPSON
None
ROBERT H. DANIELS
None
GREGORY R. DUBE
None
WILLIAM J. ROBERTS
None