Engaged Capital Sends Letter to Fellow Rovi Shareholders

Apr 16 2015 | 7:46pm ET

Engaged Capital has written a letter to shareholders of Rovi Corporation and urged them to support the hedge fund's three nominations to the company's board. 

The hedge fund owns 550,000 shares (0.49%) of the company, which sells television guide programs to cable providers. It seeks to replace three of Rovi's long-term directors, chairman Andrew Ludwick, James Meyer, and James O'Shaughnessy. The firm said that the three have "overseen sustained destruction of shareholder value at Rovi for over a decade on average."

Last year, the directors ran unopposed and received 70% support. The next annual shareholder meeting is set for May 13.

The "entrenched long-tenured board continues to destroy shareholder value," Engaged Capital said in a statement. The hedge fund has nominated David Lockwood, Raghavendra Rau and Glenn Welling.

"We believe the incumbent Board displays all the hallmarks of a broken and unaccountable governance structure that has incubated poor decision making and led to the continued destruction of shareholder value."

The hedge fund listed a number of grievances in its letter, most notably the 50% decline in share price over the last five years and the lack of revenue growth despite a $1.3 billion investment of shareholder capital since 2011.

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