Prominent pay-TV user-guide specialist Rovi Corp. has hired investment bank Credit Suisse to defend itself from a proxy fight initiated last week by activist investor Glenn Welling's Engaged Capital hedge fund.
Valued at around $2 billion, Santa Clara, Calif.-based Rovi holds patents for TV programming guides that are licensed by pay-TV operators, among others. Newport Beach, Calif.-based Engaged Capital has been pressing Rovi management and its directors about strategy, costs, capital allocation, compensation and governance since the hedge fund first bought into the company back in April 2013.
The fund owns about 0.6 percent of Rovi, according to Bloomberg.
In a statement sent out Friday, Engaged Capital says it nominated five individuals for Rovi board seats in December, only to encounter "seeming disinterest" from the board.
"All five of the company's independent directors have been on the board since the formation of today's Rovi through the merger of Macrovision and Gemstar in May of 2008," read a letter sent Friday from Engaged Capital to Rovi's board, declaring the proxy fight. "During the seven years since the merger announcement, shareholder returns have been negative. Change is clearly needed."
Responding to Bloomberg, Rovi management had this statement: "Engaged Capital refused to cooperate and denied our requests to interview their recommended nominees that fit our search criteria. We are disappointed that Engaged Capital has chosen not to participate."
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