Benzinga | May 20, 2021 04:13PM EDT

Box Amended 13D Filing From Starboard Value Shows Slightly Raised Stake From ~12.75M Shares To 13M Shares, Includes Comment Fund Submitted Books, Records Request

On May 20, 2021, Starboard Value LP (together with its affiliates, "Starboard") submitted a books and records request (the "Books and Records Request") pursuant to Section 220 of the Delaware General Corporation Law in order to gather information regarding potential mismanagement and/or malfeasance by the Issuer's management and/or members of the Issuer's Board of Directors (the "Board") and potential breaches of fiduciary duties by certain members of the Board in connection with the Issuer's review of strategic options, which concluded with (i) the Issuer's entrance into an Investment Agreement on April 7, 2021 with entities managed or advised by KKR Credit Advisors (US) LLC or affiliates thereto (collectively, the "KKR Investors") relating to the issuance and sale of 500,000 shares of the Issuer's Series A Convertible Preferred Stock for an aggregate purchase price of $500 million (the "Series A Financing"), and (ii) the Issuer's announcement that it expects to use the proceeds from the Series A Financing to fund a share repurchase through a "Dutch auction" self-tender of up to $500 million of its common stock. As set forth in the Books and Records Request, Starboard believes the Series A Financing has no bona fide business purpose given the Issuer's substantial cash balance and was done solely to entrench the Board and "buy the vote" ahead of a potential election contest with Starboard. While the Board's recent announcement that it abandoned the voting agreement with the KKR Investors may have allowed it to reach an agreement or understanding with respect to the previously filed Complaint against the Board in connection with the Series A Financing, Starboard believes the true intent remains clear even without an express contractual obligation with respect to voting. Starboard believes the Board's immediate reversal as to the voting agreement demonstrates that the Board knew it had done something wrong in seeking to lock up more than 10% of the outstanding vote through the Series A Financing. The full text of the Books and Records Request is attached hereto as Exhibit 99.1 and is incorporated herein by reference.