Starboard Takes Stake in ComScore, Sues to Force Annual Meeting

(Bloomberg) -- Starboard Value LP, the activist fund run by Jeff Smith, disclosed a 4.9 percent position in ComScore Inc. and filed a lawsuit to force the company to hold an annual general meeting.

The New York-based hedge fund wants the internet and entertainment company to hold an annual meeting for the purpose of electing eight directors, it said in the lawsuit, filed Tuesday in Delaware. The company hasn’t held an annual meeting in two years amid an accounting probe.

“Because of this delay, only four of the company’s 12 sitting directors have been elected by the stockholders,” Starboard said. “The court should not permit the company to stall corporate democracy any longer.”

The last time ComScore held an annual meeting was July 21, 2015. Since then, the company hasn’t file audited financials for 2015 and 2016, it appointed three new directors without a shareholder vote and, without approval of investors, it adopted a poison pill to discourage any shareholder from acquiring a more than 5 percent position, Starboard said.

Representatives of Reston, Virginia-based ComScore and Starboard didn’t immediately respond to requests for comment.

ComScore’s stock has been under pressure since the company announced a review of its financials in February 2016 that later revealed insufficient public disclosures about its performance. That disclosure came just weeks after it acquired Rentrak Corp. in a stock swap valued at more than $800 million.

Led by co-founder and Chief Executive Officer Gian Fulgoni, ComScore tracks online viewership for websites and box-office performance of Hollywood films.

To contact the reporters on this story: Scott Deveau in New York at sdeveau2@bloomberg.net, Joshua Fineman in New York at jfineman@bloomberg.net.

To contact the editors responsible for this story: Elizabeth Fournier at efournier5@bloomberg.net, Devin Banerjee