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Depomed Inc (DEPO): Starboard Value LP Schedules Special Meeting of Shareholders

Published on September 22, 2016 at 11:09 am by Insider Monkey Staff in Hedge Funds, News
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A newly-amended 13D filing with the SEC, revealed that on September 16, Jeffrey Smith‘s Starboard Value LP asked for the Special Meeting of shareholders of Depomed Inc. (NASDAQ:DEPO) to be scheduled for November 15, 2016, by delivering Special Meeting Request Form and accompanying WHITE request cards from Depomed’s shareholders, which hold the right to cast no less than 10% of the votes. Three days later, the fund sent a letter to Depomed’s shareholders in which it mentioned  providing the company with more than necessary approvals to call the Special Meeting and that it has chosen November 15, 2016, as the date of the meeting.

Starboard Value LP also disclosed in the letter that, according to latest reports, it seems that Depomed may have hired bankers to examine a sale of the company, which, according to Starboard Value’s opinion may attract many potential buyers, and an outright sale may turn out to be the best way to unlock shareholder value. Nevertheless, the fund is worried about the intents of the sale, and hence, find it indispensable for directors recommended by Starboard Value to get included in the sale process to protect shareholders’ interests. Furthermore, Starboard Value defined its “continuity plan in the letter for expanding the Board to eleven members to add back up to three incumbent directors in addition to Starboard’s two highly qualified advisors if it is successful in replacing the Board at the Special Meeting.”

On the same day this letter was sent to shareholders, Depomed contacted Starboard Value to confirm that the Special Meeting is scheduled for November 15, 2016. The fund’s stake in the company currently consists of 6.02 million common shares, which represent 9.8% of the company’s outstanding stock.
Depomed is a specialty pharmaceutical company mainly focused on therapeutics and products for treating pain and other central nervous system conditions. Over the past 12 months, the company’s stock increased by 2.77%. For the second quarter of 2016, Depomed reported earnings per share of $0.27 and revenue of $116.68 million, which compares to EPS of $0.28 and revenue of $94.50 million for the corresponding quarter in 2015. Earlier this month, Mizuho boosted its price target to $27 from $23, with a ‘Buy’ rating on Depomed’s stock, and Janney Mongomery Scott reiterated its ‘Buy’ rating on it, with a price target of $28.
Jeff Smith
The number of investors long Depomed (NASDAQ:DEPO) hasn’t changed in recent months, and at the end of the June quarter 23 hedge funds from our database reported long positions in the company. Among them were Richard Mashaal’s Rima Senvest Management, which held a position worth around $82.25 million, Mitchell Blutt’s Consonance Capital Management, with a position in the company valued at $44.64 million, Joseph Edelman’s Perceptive Advisors, Manoneet Singh’s Kavi Asset Management, and Robert B. Gillam’s McKinley Capital Management.

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You can access the original SEC filing by clicking here.

Ownership Summary Table

Name Sole Voting Power Shared Voting Power Sole Dispositive Power Shared Dispositive Power Aggregate Amount Owned Power Percent of Class
STARBOARD VALUE 6,015,000 6,015,000 6,015,000 6,015,000 6,015,000 9.8%
STARBOARD VALUE AND OPPORTUNITY MASTER FUND LTD 4,636,387 6,015,000 4,636,387 6,015,000 4,636,387 7.6%
STARBOARD VALUE AND OPPORTUNITY S 548,714 6,015,000 548,714 6,015,000 548,714 Less than 1%
STARBOARD VALUE AND OPPORTUNITY C 304,821 304,821 304,821 Less than 1%
STARBOARD VALUE R 304,821 304,821 304,821 Less than 1%
STARBOARD VALUE R GP 304,821 304,821 304,821 Less than 1%
STARBOARD VALUE GP 6,015,000 6,015,000 6,015,000 9.8%
STARBOARD PRINCIPAL CO 6,015,000 6,015,000 6,015,000 9.8%
STARBOARD PRINCIPAL CO GP 6,015,000 6,015,000 6,015,000 9.8%
JEFFREY C. SMITH 16,450 16,450 6,015,000 9.8%
MARK R. MITCHELL 6,015,000 9.8%
PETER A. FELD 6,015,000 9.8%
GAVIN T. MOLINELLI 16,450 0%
JOHN J. DELUCCA 0%
JAMES P. FOGARTY Less than 1%
PETER A. LANKAU 0%
MARY K. PENDERGAST 0%
ROBERT G. SAVAGE 0%
JAMES L. TYREE 0%

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Page 1 of 22 – SEC Filing

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
(Rule 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT
TO § 240.13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO
§ 240.13d-2(a)
(Amendment No. 4)1
Depomed, Inc.
(Name of Issuer)
Common Stock, no par value
(Title of Class of Securities)
249908104
(CUSIP Number)
JEFFREY C. SMITH
STARBOARD VALUE LP
777 Third Avenue, 18th Floor
New York, New York 10017
(212) 845-7977
STEVE WOLOSKY, ESQ.
OLSHAN FROME WOLOSKY LLP
1325 Avenue of the Americas
New York, New York 10019
(212) 451-2300

(Name, Address and Telephone Number of Person

Authorized to Receive Notices and Communications)
September 16, 2016
(Date of Event Which Requires Filing of This Statement)
If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§ 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box ¨.
Note:  Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits.  See § 240.13d-7 for other parties to whom copies are to be sent.
_______________
1              The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

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