Marvell Adds Directors to Settle with Starboard
April 27 2016 - 11:00AM
Dow Jones News
Marvell Technology Group Ltd. struck a deal Wednesday with
activist investor Starboard Value LP, agreeing to add
Starboard-backed directors to its board and becoming the latest
company to concede board seats to fend off a proxy fight.
Under the terms of the agreement, Marvell will name Peter Feld,
a managing member at Starboard, Richard Hill and Oleg Khaykin to
its board. Starboard will designate an additional independent
director to be added to the Marvell board "as soon as practical"
and subject to "the reasonable approval of the board," Marvell
said.
The company also will add Robert Switz, chairman at Micron
Technology Inc., as part of its board shakeup.
In turn, Starboard has agreed to certain standstill and voting
commitments.
Marvell's deal marks the latest in a string of companies opting
to prevent proxy battles by relinquishing board seats. On
Wednesday, Yahoo Inc. said it would add four directors to its
board, resolving a battle with Starboard that had put increasing
pressure on CEO Marisa Mayer to turn around or sell the beleaguered
company.
Last month, Autodesk Inc. named three new directors to its
board, settling with investors Sachem Head and Eminence Capital.
Earlier this year, billionaire investors Carl Icahn and John
Paulson dropped their public fight with American International
Group Inc., agreeing to stand down for a year in exchange for two
board seats. Mr. Icahn made a similar deal with Cheniere Energy
Inc. last year when the company agreed to name two board members he
had proposed.
Starboard in February took a 6.7% stake in the chip maker,
jumping in after Marvell's stock had tumbled on news that it was
conducting an internal review into its accounting. Starboard had
said it saw room from Marvell to improve its margins and make other
improvements.
"We are pleased to have reached this agreement with Starboard
and look forward to working constructively together as Marvell
moves forward," Arturo Krueger, Marvell's lead independent
director, said Wednesday.
Mr. Feld said Starboard was similarly pleased to have reached
the deal. "We believe there is a significant opportunity to regain
and solidify Marvell's position as a leader in storage, networking,
connectivity, and multimedia solutions," he said, highlighting the
other new directors' experience in the semiconductor industry.
Marvell, based in Bermuda but run from Santa Clara, Calif.,
makes semiconductors that are used primarily in storage devices and
for networking. After announcing the internal probe in September,
the company disclosed in December that two government agencies were
investigating its accounting and other issues. Last month, the
company's board fired the husband-and-wife management team that
founded and led the chip maker for two decades, following its
determination that Chief Executive Sehat Sutardja and President
Weili Dai had pressured sales and finance personnel to meet revenue
targets.
On Wednesday, the company said it had launched a search for a
new CEO.
Shares in the company, down 28% over the past 12 months, added
1.4% in early trading.
Write to Lisa Beilfuss at lisa.beilfuss@wsj.com
(END) Dow Jones Newswires
April 27, 2016 10:45 ET (14:45 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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