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Depomed Inc (DEPO): Starboard Value Blasts The Company’s Board, Hires Special Advisors

Published on July 28, 2016 at 10:51 am by Insider Monkey Staff in Hedge Funds, News
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Jeffrey Smith and Starboard Value are gearing up for the proxy fight against Depomed Inc (NASDAQ:DEPO) current board. In a recent filing with the Securities and Exchange Commission, Starboard Value announced the appointment of Robert G. Savage and James L. Tyree as advisors, to help them overturn the firm’s current hierarchy. The fund holds 6.01 million shares of Depomed or 9.8% of its common stock, which gives it the right to call for a special shareholder meeting.

In the letter sent to Depomed Inc (NASDAQ:DEPO), Starboard also states its intention to invite Messrs. Savage and Tyree to join the company’s board. According to their biographies that were included in the letter, Robert Savage and James Tyree have extensive knowledge of the industry, having served on the boards of pharmaceutical giants like Pfizer Inc. (NYSE:PFE) and Bristol-Myers Squibb Co (NYSE:BMY), as well as other biotechnology companies.

Jeffrey Smith has also criticized the company’s board for using the company’s bylaws to intentionally delay the special shareholder meeting in order to “disenfranchise shareholders and further entrench itself.” Depomed Inc (NASDAQ:DEPO) develops products for the treatment of pain and other central nervous system (CNS) conditions.

Jeff SmithAt the end of the first quarter, roughly 26% of Depomed Inc (NASDAQ:DEPO) common stock was held by 23 top hedge funds, unchanged from the end of December. Richard Mashaal‘s Rima Senvest Management was also heavily invested in Depomed, as its position accounted for more than 5% of its equity portfolio. The fund held 4.98 million shares, as reported in its latest 13F filing. Billionaire Steve Cohen was also betting on the stock, with his family office having reported ownership of 1.86 million shares at the end of March.

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 6,015,000 6,015,000 6,015,000 6,015,000 6,015,000 9.8%
STARBOARD VALUE AND OPPORTUNITY MASTER FUND LTD 4,636,387 6,015,000 4,636,387 6,015,000 4,636,387 7.6%
STARBOARD VALUE AND OPPORTUNITY S 548,714 6,015,000 548,714 6,015,000 548,714 Less than 1%
STARBOARD VALUE AND OPPORTUNITY C 304,821 304,821 304,821 Less than 1%
STARBOARD VALUE R 304,821 304,821 304,821 Less than 1%
STARBOARD VALUE R GP 304,821 304,821 304,821 Less than 1%
STARBOARD VALUE GP 6,015,000 6,015,000 6,015,000 9.8%
STARBOARD PRINCIPAL CO 6,015,000 6,015,000 6,015,000 9.8%
STARBOARD PRINCIPAL CO GP 6,015,000 6,015,000 6,015,000 9.8%
JEFFREY C. SMITH 16,450 16,450 6,015,000 9.8%
MARK R. MITCHELL 6,015,000 9.8%
PETER A. FELD 6,015,000 9.8%
GAVIN T. MOLINELLI 16,450 0%
JOHN J. DELUCCA 0%
JAMES P. FOGARTY Less than 1%
PETER A. LANKAU 0%
MARY K. PENDERGAST 0%
ROBERT G. SAVAGE 0%
JAMES L. TYREE 0%

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Page 1 of 32 – SEC Filing

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
(Rule 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT
TO § 240.13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO
§ 240.13d-2(a)
(Amendment No. 3)1
Depomed, Inc.
(Name of Issuer)
Common Stock, no par value
(Title of Class of Securities)
249908104
(CUSIP Number)
JEFFREY C. SMITH
STARBOARD VALUE LP
777 Third Avenue, 18th Floor
New York, New York 10017
(212) 845-7977
 
STEVE WOLOSKY, ESQ.
OLSHAN FROME WOLOSKY LLP
1325 Avenue of the Americas
New York, New York 10019
(212) 451-2300

(Name, Address and Telephone Number of Person

Authorized to Receive Notices and Communications)
July 26, 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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