ValueAct Capital Management LP, the activist hedge fund headed by Jeff Ubben is negotiating with the board of directors of Microsoft Corporation (NASDAQ:MSFT). The hedge fund is attempting to secure a seat in the board of the software giant, according to report from Nadia Damouni and Bill Rigby of Reuters, based on the information obtained from a source familiar with the discussions.
Microsoft Corporation (NASDAQ:MSFT) and ValueAct History
The activist hedge fund owns more than 33.3 million shares of Microsoft Corporation (NASDAQ:MSFT), based on its 13 F Filing with the Securities and Exchange Commission (SEC) in the first quarter this year. The stockholding of the ValueAct represents 0.4% of the total outstanding shares of the software giant. Some speculate that the hedge fund is increasing its stake in Microsoft.
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According to the sources, ValueAct wants to appoint a director to the board of the software giant to be able to have more say in the strategies of the company as it adapts the new world of mobile computing.
In addition, the sources said one of the issues raised by ValueAct during its discussion with the board of Microsoft Corporation (NASDAQ:MSFT) is the ‘obvious lack of planning for the succession’ by the top executives of the company. Steve Ballmer has served as chief executive officer of the company since 2000, and there is no sign that he would step down or the company will replace him.
Microsoft Corporation (NASDAQ:MSFT) and CEO Steve Ballmer
Steve Ballmer has previously stated that he aims to serve as CEO of Microsoft Corporation (NASDAQ:MSFT) until his youngest child goes to college, which will be in 2017 or 2018. Ballmer has not made any statement regarding the issue recently. The company previously stated that it has an existing CEO succession plan, but did not provide further details about who would replace Ballmer.
Last month, the Federal Trade Commission (FTC) approved the early termination or antitrust clearance for an undisclosed transaction between Microsoft Corporation (NASDAQ:MSFT) and ValueAct Master Fund. The move by the agency provides a green light for the hedge fund to go ‘activist’ on the software giant. The activist hedge fund had been advocating for changes in Microsoft Corporation (NASDAQ:MSFT) using Nomura as an advisor, and now the battle for the board seat will likely heat up.
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