Investment company Legion Partners Asset Management is calling for a potential sale of Momentive (previously known as SurveyMonkey) and is threatening a 'boardroom battle' if the company doesn't 'engage in a meaningful way', according to financial news source Bloomberg.
In August, Momentive reported a 20% increase in second quarter revenue to $109.4m, from $90.9m a year earlier; with a 33% rise in Enterprise sales to $33.9m and self-service revenue up 15% to $75.5m. However, Bloomberg says that Momentive shares have fallen about 21% this year. On September 21st Legion, which owns a 1.4% stake in Momentive, wrote to the latter's Board (a copy was obtained by Bloomberg), urging it to hire a bank to run a review, with the aim of addressing what it describes as 'underperformance', which it blames on 'poor governance, oversight and inability to take strategic action to drive stockholder value'.
On Wednesday, Legion said in an investor presentation that it believes that Momentive could fetch as much as $40 a share in sale (Momentive's shares were trading at $20.34 yesterday afternoon) and give the company a market value of about $3 billion. Legion has also called for its Senior Analyst Sagar Gupta to be given a seat on Momentive's Board, and says it wants Momentive to publicly commit to declassifying its Board, meaning that directors would have to stand for re-election each year.
In the letter to Momentive, Legion MDs Chris Kiper and Ted White said: 'We believe it is prudent for the Board to have a robust and objective strategic alternatives process, as its efforts to obtain appropriate valuation have failed thus far'.
Web sites: www.legionpartners.com and www.momentive.ai .
All articles 2006-21 written and edited by Mel Crowther and/or Nick Thomas unless otherwise stated.