Carl Icahn Tweets, Gets Two Nuance Board Seats

Activist investor Carl Icahn succeeded in his effort to take part in maneuvering the business operations of Nuance Communications Inc. (NASDAQ:NUAN) to ensure its growth and profitability after securing two seats in the board of directors of the speech recognition and digital imaging company.

Carl Icahn Tweets, Gets Two Nuance Board Seats

Nuance’s agreement with Icahn group

Nuance Communications Inc. (NASDAQ:NUAN) disclosed its nomination and standstill agreement with Icahn’s group. Under the terms of the agreement, the company added two board seats for Icahn’s designees, and the activist investor appointed his son Brett Icahn, and David Schecter, a senior analyst at his firm.

In exchange, Icahn agreed not to solicit any proxy regarding any issue before the 2014 annual stockholders’ meeting and he will not acquire more than 20% of the company’s outstanding voting shares during the standstill period.

Paul Ricci welcoming board of directors

In a statement, Paul Ricci, chairman and chief executive officer of Nuance Communications Inc. (NASDAQ:NUAN) said, “We are pleased to welcome Brett and David to our board of directors and look forward to their contributions. Over the past few quarters, we have made significant progress in our efforts to deliver enhanced stockholder value, and we remain enthusiastic about Nuance’s long-term prospects.”

Currently, Icahn’s stockholding in Nuance Communications Inc. (NASDAQ:NUAN) is 16.7% of the outstanding shares of the company. The activist investor initially acquired a 9.3% passive position in the company early this year. He started increasing his stake when the company reported weak earnings results in the second quarter. Back then, sources close to Icahn told ValueWalk that the activist investor plans to amass more shares in the company to force a takeover or buy it outright.

Nuance management taking advice of Goldman

Nuance Communications Inc. (NASDAQ:NUAN) management immediately sought the advice of Goldman Sachs Group Inc (NYSE:GS) after Icahn acquired a stake in the company. In August, the company adopted a shareholder rights plan to prevent activist investors like Icahn from acquiring more than a 20% stake in the company.

Icahn confirmed that his firm obtained two board seats in Nuance Communications Inc. (NASDAQ:NUAN) via Twitter. His tweet reads, “Happy to have reached an agreement with Nuance Communications where Dave Schechter and Brett Icahn will join the board of directors.” He added, “I’m optimistic their impact at NUAN will be similar to The Hain Celestial Group, Inc. (NASDAQ:HAIN), where stock went from $20.20 to $79.56 over the 3 years they sat on the board.”


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