Box Details How Starboard Talks Soured After Call to Fire CEO
(Bloomberg) -- Box Inc. detailed Tuesday how its relationship with Starboard Value began to sour in December when the activist investor issued an ultimatum to either sell itself, fire Chief Executive Officer Aaron Levie, or face a proxy fight.
In the early days of the fight, Starboard Managing Member Peter Feld was offered a seat on the board as part of a proposed settlement but refused to serve alongside Levie unless it was to oversee a sale of the company, according to a regulatory filing Tuesday. The New York-based hedge fund said in December the company shouldn’t turn down any offers in the “low twenties” and Starboard would be a seller at that price, the filing shows.
Shares in Box fell 3% in trading Tuesday to $26.03 at 12:11 p.m. in New York.
Starboard, which has nominated four directors to Box’s board, has also been a vocal critic of a deal the company struck with KKR & Co. in April. But the filing shows Starboard offered to drop its fight if Feld was appointed to the board and Starboard was allowed to participate in the $500 million investment by KKR. While the company was amenable to Starboard getting involved in the deal, it drew a line in the sand when it came to Feld getting a seat on the board after the back and forth, the filing states.
Starboard has said if Feld doesn’t get a board seat, there is no path to a settlement.
Starboard, for its part, said it didn’t agree with the characterization of events and discussions. It said in an emailed statement it continues to believe the KKR deal was unnecessary, and the plan to use the proceeds from it to buy back shares failed and led to significant dilution.
Both sides have said they’re open to a negotiated settlement but have accused the other of refusing to meaningfully engage. A shareholder vote is expected later this summer.
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