Starboard Value: Box CEO would be invited to remain on the board if our nominees were to win

Newswires are buzzing this week about Starboard Value’s demands that Box co-founder and CEO Aaron Levie be removed from his job or that Box be put up for sale immediately. This according to a proxy filing and press release that the Redwood City, Calif content services provider released July 6. But the hedge fund seems to have reversed its intent in an earlier filing. More on that later, first the backstory.

While it’s somewhat unusual for a publicly traded firm to publicize its conversations with investors (maybe we can see all of them, as they occur from now on?), Box chose to present its take on Starboard’s bullying as follows:

• After expressing support for the company’s (Box’s) path throughout much of 2020, in December Starboard abruptly reversed course and repeatedly demanded the Box Board sell the company, even at a share price significantly below current trading levels.
• Following Box’s release of fiscal second quarter results in August 2020, Starboard stated that it was “thrilled to see the company breaking out and performing better both on the top and bottom line.” Starboard continued, “Appreciate you guys working with us and accepting the counsel. Not everyone behaves that way and it is greatly appreciated. Shows your comfort as a leader and a willingness to adapt. Very impressive.”
• One quarter later, following the release of fiscal third quarter results in December 2020, Starboard abruptly reversed course and demanded that the Box Board immediately sell the company or fire the CEO, or otherwise Starboard would launch a proxy contest. Starboard has consistently repeated this demand since December. When the stock was trading at $17–18 per share, Starboard indicated that a normal market-based premium would be acceptable to Starboard as a sale price. Subsequently, in mid-March when the stock was trading in the $21–22 per share range, Starboard indicated that a low-premium deal would be acceptable and should be pursued.
• Starboard made an unsolicited request to participate in the KKR-led investment.
• Despite publicly criticizing the KKR-led investment, after the transaction was announced Starboard privately stated that it would not move…