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13D Filing: Starboard Value Reports Stake and Goes Activist on Depomed Inc (DEPO)

According to a recent 13D filing with the US Securities and Exchange Commission, Jeff Smith‘s Starboard Value LP has acquired a valuable position in Depomed Inc (NASDAQ:DEPO) owning 4.14 million shares, which account for 6.8% of the company’s outstanding stock.

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In addition, the investor revealed his concerns about the board’s intentions to strengthen themselves instead of working on achieving the maximum value for all shareholders. The filing added that since 2015 Starboard Value LP was following changes at the  Depomed Inc (NASDAQ:DEPO) when the company initiated shareholder-unfriendly practices to discourage Horizon Pharma PLC (NASDAQ:HZNP)’s attempt to arrange an acquisition of the company for at least $33.00 per share. It was announced that Starboard Value LP will recommend one or more candidates for the position of the director, in order to assure a new board that would be more inclined to the shareholders’ benefits.

Depomed’s stock jumped on the back of the news regarding Starboard’s involvement, since the fund is known for its track record of successfully reforming companies such as Darden Restaurants. The company issued a statement in response to Starboard filing and said that:

Depomed welcomes open communications with its shareholders and values constructive input toward the goal of enhancing shareholder value. Depomed notes that Starboard has not communicated with the Company prior to filing the 13D and has not attempted to hold any discussions with the Company. Depomed’s Board and management are committed to creating value for all Depomed shareholders.”

 Overall, 23 of the hedge funds tracked by Insider Monkey were long this stock at the end of the last year, down by 28% over the quarter. In addition to Starboard, other shareholders of Depomed Inc (NASDAQ:DEPO) include Richard Mashaal’s Rima Senvest Management, Kevin Kotler’s Broadfin Capital, Matthew Mark’s Jet Capital Investors, Paul Sinclair’s Blue Jay Capital Management, and Joseph Edelman’s Perceptive Advisors.

You can access the original SEC filing by clicking here.

Ownership Summary Table

Name Sole Voting Power Shared Voting Power Sole Dispositive Power Shared Dispositive Power Aggregate Amount Owned Power Percent of Class
STARBOARD VALUE 4,140,000 4,140,000 4,140,000 4,140,000 4,140,000 6.8%
STARBOARD VALUE AND OPPORTUNITY MASTER FUND LTD 3,189,313 4,140,000 3,189,313 4,140,000 3,189,313 5.2%
STARBOARD VALUE AND OPPORTUNITY S 377,502 4,140,000 377,502 4,140,000 377,502 Less than 1%
STARBOARD VALUE AND OPPORTUNITY C 209,844 209,844 209,844 Less than 1%
STARBOARD VALUE R 209,844 209,844 209,844 Less than 1%
STARBOARD VALUE R GP 209,844 209,844 209,844 Less than 1%
STARBOARD VALUE GP 4,140,000 4,140,000 4,140,000 6.8%
STARBOARD PRINCIPAL CO 4,140,000 4,140,000 4,140,000 6.8%
STARBOARD PRINCIPAL CO GP 4,140,000 4,140,000 4,140,000 6.8%
JEFFREY C. SMITH 4,140,000 6.8%
MARK R. MITCHELL 4,140,000 6.8%
PETER A. FELD 4,140,000 6.8%
Jeffrey Smith
Jeffrey Smith
Starboard Value LP

Page 1 of 35 – SEC Filing

Washington, D.C. 20549
(Rule 13d-101)
§ 240.13d-2(a)
(Amendment No.  )1
Depomed, Inc.
(Name of Issuer)
Common Stock, no par value
(Title of Class of Securities)
(CUSIP Number)
777 Third Avenue, 18th Floor
New York, New York 10017
(212) 845-7977
Park Avenue Tower
65 East 55th Street
New York, New York 10022
(212) 451-2300

(Name, Address and Telephone Number of Person

Authorized to Receive Notices and Communications)
March 28, 2016
(Date of Event Which Requires Filing of This Statement)
If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§ 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box ¨.
Note:  Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits.  See § 240.13d-7 for other parties to whom copies are to be sent.
1              The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).
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