Box (BOX) Explores Sale Following Pressure From Starboard Value - Reuters

March 22, 2021 11:50 AM EDT

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(Updated - March 22, 2021 11:58 AM EDT)

Box (NYSE: BOX) is exploring a sale of the company amid pressure from hedge fund Starboard, Reuters reported citing people familiar with the matter.

The company has discussed a potential deal with interested buyers, including other companies and private equity firms, the report added.

Speculation has been rampant the past few sessions after Box disclosed it would extend the board nomination window from April 13 until May 11.

In February, Reuters reported that Starboard is preparing to launch a board challenge unless the company takes steps to boost value for shareholders. Starboard has been an investor in Box since 2019 and in March 2020 agreed not to launch a board challenge in 2020 under an agreement to add three new independent directors.

Another three of Box's nine directors is up for election this year. Starboard is said to be exploring putting forth candidates for all three board seats.

Gordon Haskett analyst Don Bilson points out that if Starboard took all the seats, it would have effective control of the company.

Bilson said the company could announce a strategic review and push back the annual meeting to prevent Starboard from taking control. The analyst also speculates CEO Aaron Levie could look to a private equity firm for protection in the form of an investment versus an outright sale.

Meanwhile, DA Davidson analyst Rishi Jaluria has always viewed Box as a top takeout candidate and thinks the company could be worth $34 per share or more in a deal. He views private equity as the most likely buyer but also highlighted strategic buyers like (NYSE: CRM), IBM (NYSE: IBM), Citrix Systems (NASDAQ: CTXS), and Google (NASDAQ: GOOGL).

(updated 1:57PM ET to add additional analyst comments)

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