Symantec Says It's Talking With Starboard Value, Stock Up Sharply Pre-Market
Symantec said it has been talking with Starboard Value over the past several weeks and is evaluating the five board nominations put forward by the activist hedge fund.
"Symantec maintains open communications with its stockholders and values constructive input that advances the goal of creating value for all stockholders," the Mountain View, Calif.-based company said in a statement early Thursday. "Over the last several weeks, we have had a dialogue with Starboard, and we plan to continue these discussions."
The company's stock is up 6.47 percent or $1.20 to $19.75 in pre-market trading Thursday. That is the highest trading price for Symantec's stock since Aug. 3. Nonethless, Symantec's stock has lost 32 percent of its value since the start of 2018.
Symantec said the Nomination and Governance Committee of its Board is evaluating the five nominations put forth by Starboard consistent with established policies. The company's 2018 Annual Meeting will not be scheduled until Symantec completes its internal investigation into concerns raised by a former employee around the company's reporting of certain non-GAAP measures.
Starboard on July 5 nominated former Intuit executive Nora Denzel, Starboard research head Peter Feld, ex-McAfee Interim President and CEO Dale Fuller, ex-CEO of Novellus Systems Richard Hill, and Marvell Technology Group board member Michael Strachan to Symantec's board of directors. Starboard collectively owns 36.1 million, or 5.8 percent, of all outstanding shares of Symantec stock.
Starboard said in filing with the U.S. Securities and Exchange Commission (SEC) that it believes shares of Symantec were undervalued at the time of purchase, and that it hopes to change the composition of Symantec's board in order to unlock more value. The hedge fund's statement of acquisition was accepted late Wednesday, and posted to the SEC website Thursday.
The investment firm believes Symantec needs operational changes to improve margins, especially in its business-facing segment, The Wall Street Journal reported early Thursday. Symantec warned in an earnings call earlier this month that it isn't closing as many deals as expected in its enterprise security unit, which sells to businesses and makes up roughly 60 percent of the company's overall revenue.