 "Microsoft offers ValueAct president seat on board")
Microsoft Corp on Friday said it offered a seat on its board to the president of ValueAct Capital Management, the activist fund manager that had pressed for a say on the software giant’s strategy after taking a $2 billion stake earlier this year.
The offer marks a victory for ValueAct, after Reuters first reported in July that the fund was seeking a board seat as poor quarterly results slammed Microsoft’s share price.
The San Francisco-based fund, which manages about $12 billion for clients, owns 0.8 percent of Microsoft’s shares. Co-founded by finance industry veteran Jeff Ubben in 2000, it has made a reputation for building stakes in companies and working with management to change fundamental strategy.
ValueAct did not say whether it would take up the offer of a board seat, and did not immediately return calls seeking comment.
The fund has not said a great deal in public about its aims with Microsoft, but people familiar with its thinking have said it was concerned about the leadership of Chief Executive Steve Ballmer, Microsoft’s foray into making hardware devices, and that it sought higher dividends and share buybacks to benefit shareholders.
ValueAct has earlier bought a $2 billion stake in Microsoft
Ballmer last week announced his plan to retire within 12 months, but said ValueAct had nothing to do with his decision.
His retirement came as a surprise, just six weeks after he launched an ambitious plan to reorganize the company around devices and services rather than its core software products, which was received coolly by investors.
Under an agreement made public on Friday, Microsoft is offering ValueAct’s president, Mason Morfit, an option to join Microsoft’s board after the technology company’s annual shareholder meeting, which is usually held in mid-November.
The agreement also provides for regular meetings between Morfit and selected Microsoft directors and management to discuss a “range of significant business issues,” Microsoft said, without giving further details about those issues.
As part of the agreement, ValueAct cannot launch a proxy contest, the generally hostile and public method of seeking to appoint new directors to a company’s board, Microsoft said in a regulatory.
If ValueAct accepts Microsoft’s offer, Morfit will become the 10th member of the board, which is led by former Symantec Corp CEO John Thompson.
Co-founder and Chairman Bill Gates and CEO Ballmer, which between them hold nearly 9 percent of Microsoft shares, also sit on the board.
Reuters