Depomed criticised by investors and urged to explore potential sale
Only a few short months after fighting off a $1 billion bid from Horizon Pharma, investors at Depomed have called on the board to explore a potential sale of the company.
Hedge Fund Starboard Value criticised the board of directors in a strongly worded letter. According to Reuters, Starboard raise concerns regarding the company’s “corporate governance deficiencies, questionable capital allocation decisions and egregious actions taken by the board to stymie strategic interest in acquiring Depomed.”
Horizon’s six month pursuit of Depomed ended up in court, with the Irish-based company losing out and failing in their attempts to acquire the pharma company. Their overtures were repeatedly rebuffed by Depomed. Starboard Value, meanwhile, who own a 9.8% stake in the company have form in taking aggressive action in companies they own shares in. According to Reuters, it engineered the ousting of the board at Darden Restaurants in 2014.
Depomed issued its own press release, commenting: “Depomed welcomes open communications with its shareholders and values constructive input toward the goal of enhancing shareholder value. Depomed notes that Starboard has not communicated with the company prior to filing the 13D and has not attempted to hold any discussions with the company.” They also recommended that shareholders take no action at this time.
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