From the time Starboard reported their 9.8% stake in Mellanox back in November 2017, the company has been under pressure to shape up or ship out. By December it was reported Mellanox was engaging with financial advisors for help but Starboard made clear their intentions in a letter to the CEO in January noting “severe concerns.”
Starboard nominated nine directors for election to the board and just to drive home the point another letter to shareholders and by March Mellanox’s board put their figurative tail between their legs and delayed the annual shareholder meeting, adopting the “dog-ate-my-homework” strategy of takeover defense. As all but the directors themselves knew was inevitable, by June the board came to an agreement with Starboard to bring on new independent directors.
Things quieted down for a while until November 7th when good ol’ Alex Sherman (@sherman4949) at CNBC reported Xilinx is working with Barclays to prepare an offer for Mellanox. (Alex – if you read this – we were big fans of your Deal of the Week podcast back at Bloomberg. Ed Hammond just didn’t do it justice.) Starboard sold only a quarter of their initial stake so they should be quite happy if this plays out as anticipated.