Mellanox reached Agreement with the Activist Fund Starboard
25 June, 2018
Jon Olson, Greg Waters and Jack Lazar are joining the Board of Directors, and the Fund will support the Board and the Management in the coming Year
Mellanox Technologies from Yokneam, Israel, has entered into an agreement with Starboard Value LP regarding the membership and composition of Mellanox’s Board of Directors. This issue could turn the company’s Annual Meeting to be held on July 25, 2018, into a battle ground in a power struggle over the board. Since November 2017, Starboard is the largest share holder of Mellanox with approximately 10.7% holdings. During the last months, the activist fund promoted an attempt to replace the board with its nominees, claiming the current board is incapable and not aggressive enough. The final decision had to be taken during the annual meeting.
Mellanox reported that under the terms of the newly reached agreement, Jon Olson and Greg Waters, independent directors recommended by Starboard, and Jack Lazar, an independent director mutually agreed upon by Mellanox and Starboard, have been appointed to the Mellanox Board, effective immediately. As a result, Dov Baharav, Shai Cohen and Tom Riordan have stepped down from the Board. As part of the agreement, Starboard will withdraw its slate of directors and vote all of its shares in favor of each of Mellanox’s Board nominees at the Company’s upcoming Annual Meeting and will support the Board for at list 12 months.
Power Struggle that Pushed up the Share Prices
The new directors come with experience in the Semiconductor’s Industry. Jack Lazar served as CFO at GoPro and General Manager at Qualcomm Atheros. Jon Olson held a variety of senior management positions at Xilinx and spent more than 25 years at Intel Corp. Gregory Waters was president and CEO of Integrated Device Technology Inc., after serving in management positions in Skyworks Solutions, Agere Systems and Texas Instruments.
“We are pleased to have reached this agreement with Starboard and welcome the new directors to the Mellanox Board,” said Irwin Federman, Chairman of the Board. Eyal Waldman (photo above), President and Chief Executive Officer, said, “The announcement reflects our ongoing commitment to creating value for shareholders. Mellanox has leading positions in many of the key markets in which we operate, including InfiniBand and Ethernet.”
Mellanox Technologies (MLNX) supply InfiniBand and Ethernet smart interconnect solutions for servers and storage. It connects 43 percent of overall TOP500 supercomputer platforms (216 systems) including both InfiniBand and Ethernet. The activities of Starboard stirred the management of the company, but made a positive contribution to its shares in NASDAQ: raised from $50 price in November 2017, to approximately $83.3 today.