UPDATE 1-Sealy comes out in support of KKR

(
Increase the response of H Partners)March 23 (Reuters)-
Sealy Corp defended its largest shareholder, KKR & Co LP, on Friday, as allegations of mismanagement and conflict of interest in hedge funds caused mattress manufacturers to lose 90% of their market value.
In a letter to Sealy earlier this month, H Partners Management LLC had a 14.
The company\'s 5% stake is aimed at KKR, not only about its management decisions, but also about the behavior of Capstone, the KKR brand advisory team.
On Friday, Sealy issued a letter from Gary Molin, chairman of the nomination and governance committee, to H Partners to address the needs of hedge funds and refute their claims.
\"We continue to accept constructive suggestions from shareholders for a long time.
The long-term interests of the company, \"Molin wrote.
\"However, we believe that when we seek the ideal candidate to lead our business and strive to improve the performance of the company for the benefit of all our shareholders, your aggressive and public remarks are not constructive.
\"Sealy, founded in the late 19 th century by cotton gin manufacturer Daniel Haines, was unveiled by KKR for $1 two years after KKR\'s acquisition from another private equity firm Bain Capital LLC.
5 billion, in 2004.
Since the initial public offering in 2006, the stock value of Sealy shareholders has collectively decreased by $1.
3 billion, about 90%.
So far, Capstone has been keen to promote its work on Sealy, whose chief executive Lawrence J. has made a compliment on KKR\'s website
Rogers, once he finds a successor to the troubled company, will retire this year.
H. Partners accused KKR of shorting
Long-term investment approach to Sealy, rather than investing the necessary resources for the company to market innovative professional products, resulting in loss of market for mattress manufacturers
Leading position.
The company has a debt of $790.
3 million, between 2006 and 2011, revenue fell by half, affected by increased competition such as Select Comfort Corp and Tempur
Pedic International Inc. is more active in meeting the soaring demand for specialty mattresses.
\"With KKR\'s support and an additional $90 million investment in 2009, the company was able to get through one of the worst recession in the past 100, while major competitors such as Simmons, spring Air and IBC filed for bankruptcy protection, \"Morin wrote.
The criticism of many H partners focused on Dean Nelson, KKR\'s advisor --in-
The chief and chief of Cape Stone
The investment company asked him to resign as director of Sealy, believing that he was facing a conflict of interest as a consulting service provider.
\"What I would like to clarify is that President Nelson has postponed all of his expenses as director of Sealy to the Sealy general stock, which will not be paid until he retires from the Sealy board.
This is further in Obama\'s interest.
Nelson is with all Sealy shareholders, \"Molin responded.
Morin added that Sealy has conducted a market survey to ensure that the expenses at the apex are lower than those charged by companies providing similar services.
H Partners requested a seat on the Sealy board of directors and offered to waive any board fees.
It also asked Sealy to nominate and a representative of the Corporate Governance Committee and the CEO search committee.
\"Since you invested in Sealy in the spring of 2011, our board has not changed and its composition is reasonable,\" Morin wrote . \".
H Partners have a good record in investing in troubled companies.
Founded in 2005 by Rehan Jaffer, the hedge fund is one of the investors of theme park operator Six Flags Entertainment during its restructuring in 2010.
\"Sealy\'s response failed to address the important role of the board of directors and KKR in undermining the value of the company\'s shareholders.
We are carefully reviewing all of our options, \"H Partners said in an email statement responding to the letter. (
The report is in New York by Greg roumelitis;
Tim Dobbyn editor and gunned letter)