Starboard withdraws Elanco board nominations: sources
(Reuters) – Starboard Value LP withdrew its nominations to Elanco Animal Health Inc’s board this month, sparing the U.S. pet drug manufacturer from a battle with the activist hedge fund, people familiar with the matter said on Monday.
Elanco did not make any concessions to Starboard, the sources said, and it is not clear why the New York-based investment firm walked away from a board challenge after putting forward three director nominees. It is also not clear whether Starboard has retained its stake in Elanco.
While the Greenfield, Indiana-based company’s shares got a boost following the release of its fourth-quarter earnings last month, they nosedived on March 19 after some U.S. lawmakers asked for its popular pet collars that repel flea and ticks to be recalled because of reports linking them to hundreds of pet deaths. Elanco says the collars, named Seresto, are safe.
Neither Starboard nor Elanco immediately responded to a request for comment.
Elanco reported strong fourth quarter 2020 earnings last month with revenue of $1.14 billion, which beat company guidance. It also raised its revenue guidance for 2021.
Some analysts said earlier this month that even though Seresto is likely to be safe, consumer fears could hurt Elanco’s business.
“The negative press is apt to pressure Seresto sales, especially as this is an over-the-counter product that does not require interaction with a vet,” Cowen analysts wrote in a research note earlier this month.
Elanco faced pressure in December from activist Sachem Head Capital Head Management LP, and agreed to hand it three board seats, including one to its portfolio manager Scott Ferguson.
Starboard also nominated directors at eHealth Inc this month, after the health insurer had just settled with another activist. Last year, Starboard won 24 seats on boards of companies it invested in, more than any other activist hedge fund.
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