Activist Investor Reaffirms Stance On Depomed, Says 'Meaningful Change Is Needed'

Starboard Value, an activist investment firm and major Depomed Inc (NASDAQ: DEPO) shareholder issued a statement Friday morning in response to the company's announcement that it has withdrawn its proposed reincorporation of the company from California to Delaware.

The company said on Thursday it will not reincorporate itself in Delware as it is not in the interest of shareholders and would result in a "costly and distracting proxy contest."

Starboard Value responded that Depomed's reasoning of a proxy contest is "completely disingenuous."

"Based upon the Board's actions over the past year, and reinforced by this recent, entrenchment attempt, we remain convinced that meaningful Board change is required at Depomed," the activist investor said in its press release. "We acquired our position in Depomed because we believe that the Company is substantially undervalued and opportunities exist to create significant value for shareholders."

Starboard Value also reaffirmed its commitment to "vigorously" continue its pursuit of replacing the company's board with a slate of its own director candidates that are "experienced" and "diverse." The firm added that its director candidates will "better serve the Company and better protect the rights and best interests of all shareholders."

Shares of Depomed were trading lower by nearly 1 percent Friday.