Depomed Spikes 10% As Activist Investor Discloses Large Stake

Shares of

Depomed IncDEPO

surged higher by more than 15 percent on Friday after notable activist investment firm Starboard Value

it has taken a 9.8 percent stake in the company. Starboard Value said in its regulatory filing that it believes shares of Depomed are "undervalued" and represent an "attractive investment opportunity." However, the activist firm added that it has "significant concerns regarding serious corporate governance deficiencies, questionable capital allocation decisions, and egregious actions" the company has taken in regards to its strategic interest. Starboard Value added that it Depomed also has a "troubling record of egregiously manipulating the corporate machinery to entrench management and the Board and believe that meaningful change is required." In a

letter delivered to Depomed's Board of Directors, Starboard Value further stated: "We have little choice at this time but to immediately commence the process to call a special meeting of shareholders in order to preserve our rights under California law and Depomed's current bylaws." Finally, Starboard Value said it will commence a search for slate of director candidates that will "ensure an experienced, diverse, and independent board, as has been our practice when proposing alternative board slates over the past fourteen years."

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Depomed Spikes 10% As Activist Investor Discloses Large Stake