Fresh blood planned for Sun's board
Sense of urgency
Sun Microsystems' board is getting some fresh blood with two new independent directors, after its largest investor stepped up involvement in the company.
Sun and US-private investment firm Southeastern Asset Management said Monday they've entered into an agreement to expand Sun's board with the two individuals.
The directors will be appointed "as soon as reasonably practicable" and be approved by both companies, Sun said in a release.
The move comes just over a month after Southeastern Asset Management and Sun said they were entering talks to have Sun's true economic value realized. Southeastern Asset Management is Sun's single largest investor, owning 22 per cent of stock - 162 million shares - having increased its holding with $2.1bn shares since May.
Three weeks after that particular statement, Sun announced it was laying off nearly a fifth of its 33,400-strong workforce as part of a major restructuring that saw the software group broken up and activities spread across separate divisions. The cuts also followed a $1.677bn net loss for its first quarter on $2.9bn revenue, down 7.1 per cent. Sun blamed the loss and poor performance on write downs and the poor economy.
Southeastern Asset Management is known for investing in companies with trading difficulties and under-valued assets whose value, it believes, can be realized.
In a statement, the investor said: "With the appointment of two new directors, the recently announced restructuring, over $3bn in cash and a long history of cash generation, we are confident Sun is well positioned for long-term success."
There are currently 11 directors on Sun's board, including chief executive Jonathan Schwartz, co-founder and former CEO Scott McNealy, and the former president and CEO of Netscape Communications Jim Barksdale. McNealy - the longest serving board member - and Barksdale have been on the board since 1982 and 1999 respectively. ®