Depomed proposes 4-month wait for vote on board overhaul


Depomed’s ($DEPO) okay with a special meeting at which a rebel shareholder hopes to wipe its board clean. It just doesn’t want to do it for another four months.

The California drugmaker Thursday proposed holding a meeting called by its board on Oct. 28--after patent litigation over pain drug Nucynta wraps up. At that point, shareholders will have all the info they need surrounding the company’s “most important asset” to make an “informed voting decision,” Depomed said in a statement.

The company is hoping proxy brawler Starboard Value--which formally called for a special meeting last month--doesn’t mind the timeframe and that the two “will work collaboratively.” The way it sees things, its plan will actually spare Starboard some extra work and expense; since Depomed will call the meeting itself, Starboard will be off the hook when it comes to soliciting other investors.

But if Starboard doesn’t like the plan? It’ll still be months before it gets its wish granted, Depomed pointed out. The company has set a record date of Aug. 19 to determine shareholders entitled to call the get-together, and Starboard will have 30 days after that to submit its meeting request. Then, it’ll have to wait between 35 and 60 days to actually hold the meeting--meaning it’ll fall sometime between Sept. 24 and Nov. 17.

The activist hedge fund first began stirring things up back in April when it announced it had snapped up close to 10% of Depomed’s shares. It pointed to the company’s thwarting of last year’s hostile takeover attempt from Horizon Pharma ($HZNP)--and to the plunge in share price that’s occurred since.

And it’s already made its feelings known about the way Depomed responds under takeover threat. In Starboard’s view, during the Horizon battle, Depomed was “egregiously manipulating the corporate machinery to entrench management and the board,” and it’s warned against the company taking any further attempts to frustrate shareholders’ efforts to enact change.

- read the release

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