Quantum lurches Starboard: Vigorous investor comes aboard
Tape-slinger invites 3 new directors to boardroom table
Blocks and Files Struggling storage biz Quantum has been in a quandary about how to react to aggressive shareholder Starboard Value.
Now the tape and disk data protection vendor has decided to play nice and invite three Starboard nominees onto its board.
It works like this: the board goes up from eight seats to nine. Jeffrey Smith, Starboard's CEO, gets one of them at once. Quantum nominates two Starboard-recommended people - Exar CEO Louis DiNardo and Imation-acquired Nexsan CEO Philip Black - for election to its board at the 2013 AGM, replacing two incumbents. So Starboard, owning around 17 per cent of Quantum's stock, gets a third of the board seats.
Quantum's CEO Jon Gacek said: "We look forward to drawing on the experience and perspectives that Jeff, Lou and Phil each bring to the board as we focus on driving growth and profit by building on our leadership in data protection and Big Data management.”
Quantum is also nominating Gregg Powers, the CEO of Private Capital Management (PCM), to its board at the AGM. PCM owns about 8 per cent of Quantum's common stock and is said to be a long-term shareholder.
Powers provided a canned quote about this: "I have long known the company and believe that the pieces are in place to substantially enhance shareholder value. I look forward to working with management and the rest of the board to help the company fully capitalise on its many market opportunities and create value for all of Quantum’s stakeholders.”
That's four new board members, with Powers possibly there to counter-balance Starboard. How can the re-jigged board, assuming the three nominees are elected at the AGM, enhance shareholder value by "building on [Quantum's] leadership in data protection and Big Data management"?
El Reg's storage desk believes that Quantum could become profitable if it were to lay off a lot of people and severely shrink its tape library product range, but such actions may effectively end Quantum's tape business as other suppliers attack its base.
The result could be a much smaller company overall making smaller revenues, which wouldn't surely appeal to Starboard Value.
Can the refreshed board turn Quantum into a lean, mean profits-generating machine by improving business execution and product packaging, or will it decide that bits of Quantum, or Quantum in its entirety, can be better run elsewhere and sell them off?
We'll probably have to wait until after Quantum's AGM, which will most likely be held in August like the 2012 AGM, to find out which way the new board's thinking is going. ®