Shares of Depomed fell about 7 percent and are now off
nearly 10 percent over the past two days after Starboard Value
announced a settlement with the specialty pharmaceutical
company that specializes in neurology-related products. The
stock is now down 29 percent year-to-date.
After the market closed on Tuesday,
Depomed announced it brought in health care veteran Arthur
Higgins to serve as president and chief executive officer. In
addition, it said Gavin Molinelli, a partner at Starboard, is
one of four individuals who have joined the board of directors.
At the same time, two individuals resigned from the board.
Under the deal, Molinelli will serve as chairman of the
nominating and corporate governance committee and will serve on
the compensation committee.
"We are pleased to have reached an agreement to work with
Depomed," said Molinelli in a joint press release. "We believe
that Arthur Higgins is an excellent choice to lead Depomed. We
are excited to have found such a qualified leader for the
Before joining Starboard and its related funds in 2006,
Molinelli was a member of the technology investment banking
group at Banc of America Securities. He previously served on
the board of Wausau Paper Corp. and Actel Corporation.
Starboard is the second-largest shareholder, with 8.8 percent
of the shares. In September, the hedge fund firm publicly said
Depomed would be "extremely attractive" to numerous potential
acquirers. In early January, there were published reports that
private equity giant KKR may make a bid for Depomed.
Separately, Jeffrey Smith’s
Starboard Value disclosed it had $5.3 billion under
management as of year-end, up about 16 percent from a year ago.
This increase is in line with the activist’s
performance last year, suggesting it did not raise money in
Two Sigma Ventures, the venture capital arm of
Two Sigma, participated in the $6.5 million financing of
Carbon Health, a healthcare startup that uses a phone app to
provide virtual doctors as well as a host of services.
Separately, Two Sigma agreed to pay a fine of $25,000 as
part of a settlement with the Chicago Board of Trade, which
accused it of violating position limit rules. Under the
settlement, the computer-driven hedge fund firm neither
admitted nor denied the rule violation. The transgression stems
from trades it made in wheat futures on February 22, 2016.