Starboard Value fields own candidates to board elections
US activist investor Starboard Value has launched a proxy battle with manufacturer TriQuint Semiconductor ahead of the 2014 shareholder meeting, demanding an overhaul of the board to back previous calls for improved performance.
Starboard Value, which owns about 7.9 percent of TriQuint – a manufacturer of amplifiers, mobile devices and other products – says it will field six candidates to TriQuint’s board, including four independent director nominees with experience in the semiconductor business and two from Starboard, including its CEO Jeffrey Smith.
‘We have serious concerns with TriQuint’s prolonged underperformance under the direction of the current management team and board,’ Smith writes in a letter to TriQuint. ‘We believe substantial change is needed on the board to ensure appropriate actions are taken to improve execution, drive better financial performance and create value for all shareholders.
‘These changes should include new highly qualified, independent directors with relevant credentials for TriQuint, as well as direct shareholder representation to ensure the best interests of all shareholders are appropriately represented on the board at all times.’
Starboard Value demanded in an October letter to TriQuint that the company sell its mobile power amplifier business, which the investment firm says is hurting the company’s profits, and focus on the more lucrative aspects of its business. Starboard says TriQuint stock has underperformed its peers by ‘more than 93 percent’ in the past five years and that selling the mobile power amplifier business would immediately improve the company’s profits and share valuation.
In a reply to Starboard’s latest letter, TriQuint argues that its share price has risen by about 60 percent so far this year ‘on considerably improved second-half financial performance. Seasonality aside, we expect continued improvement, with financial results in 2014 substantially better than in 2013.’
