Rebel Depomed shareholder pushes for complete board turnover


Last month, activist investor StarBoard Value said it wanted 6 seats on Depomed’s board. And it was serious.

Thursday, StarBoard--which holds a 9.9% stake in the California drugmaker--formally called for a special meeting of shareholders. There, it hopes to remove Depomed’s entire 6-person board and instate its own nominees--former Endo ($ENDP) CEO Peter Lankau and StarBoard’s own CEO, Jeffrey Smith, among them.

“We believe that Depomed is deeply undervalued and significant opportunities exist within the control of management and the board of directors to unlock substantial value,” Starboard said in a letter seen by The Wall Street Journal.

Starboard first made its ambitions known early last month, when it unveiled in an SEC filing that it had been monitoring the pharma since 2015. It pointed to Depomed’s antitakeover moves--which went on display last year as it worked to evade hostile suitor Horizon Pharma ($HZNP)--and claimed Depomed was “egregiously manipulating the corporate machinery to entrench management and the board.”

Depomed, for its part, said Thursday that it wasn’t sure why Starboard had taken to a public solicitation to call a special meeting. More than four weeks ago, after StarBoard first came calling about a special meeting, “Depomed was prepared to facilitate Starboard’s delivery of the formal notice to call a special meeting without having to conduct any further solicitation,” the company said in a statement.

As for StarBoard’s new requests? Depomed’s board will consider them “in due course,” the drugmaker said.

- get more from the WSJ (sub. req.)

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