Aecom Could Face Repeat Board Fight With Activist Starboard

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Aecom’s standstill agreement with activist investor Starboard Value expires next week, setting the stage for a potential boardroom battle at the engineering services firm for a second year in a row.

The New York-based hedge fund, which owns a roughly 3.7% stake in Aecom, butted heads with the company in June over the appointment of new Chief Executive Officer Troy Rudd. The dispute resulted in Starboard Managing Member Peter Feld resigning from the board in protest.

Feld, who led the search committee for a new CEO, said in his resignation letter he wasn’t informed of the decision to promote Rudd, who was chief financial officer at the time. Feld said he opposed the move and that the committee had been in the midst of interviewing three highly qualified candidates.

Feld said at the time that Starboard reserved the right to any action it deemed necessary, paving the way for a second board fight.

The agreement with Starboard, which expires Nov. 18, was put in place nearly a year ago as part of a settlement between the parties that saw three directors put forth by Starboard, including Feld, added to Aecom’s board. It is unclear whether Starboard will nominate directors, and if so, how many.

Starboard would have until Dec. 10 to nominate directors at the company, according to a regulatory filing.

A representative for Starboard couldn’t be reached for comment. A representative for Aecom declined to comment.

Starboard has a history of nominating full slates of directors during proxy fights. In the case of Aecom, Starboard could nominate as many as eight new directors to swap out the incumbents.

Since Feld stepped down from the board, a fourth director nominated by Starboard, Bradley Buss, joined.

It wouldn’t be the first time Starboard has picked a fight at a company in back-to-back years. In May, the activist took control of the board of materials maker GCP Applied Technologies Inc. by winning eight of 11 seats. That proxy fight also followed their settlement the previous year.

Canada’s WSP Global Inc. held takeover talks with Aecom this year, Bloomberg News reported, although talks broke off before they could reach a deal.

Aecom rose 0.4% to close at $47.57 in New York on Thursday, giving the company a market value of $7.6 billion. The stock is up 10% in the past year.

©2020 Bloomberg L.P.

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