Starboard nominates directors at eHealth after earlier settlement

[March 23, 2021]  By Svea Herbst-Bayliss

BOSTON (Reuters) - Activist investor Starboard Value LP said on Monday that it nominated four directors to the board at eHealth Inc only days after the insurer reached a settlement for two seats with another firm.

Starboard, which owns 7% of eHealth, said in a regulatory filing that it feels the company's stock is undervalued, sending the stock price up nearly 5% in after-hours trading.

Starboard nominated Peter Feld, a partner and the firm's research director, plus three others.

EHealth said it has held discussions with Starboard and is "open minded."

"The Board is reviewing Starboard’s nominees and will present its formal recommendation in due course," the company said in a statement.

The move comes less than two weeks after eHealth agreed with hedge fund Hudson Executive Capital to add two independent directors to the board, a move that already pushed the share price higher.

The two sides agreed to add John Hass, the former CEO of Rosetta Stone, immediately, bringing their board membership to eight, and pledged to find another director in the coming weeks.

Hudson Executive, which owns roughly 5.8% of eHealth, had also expressed concerns about the company's stock price.

The stock closed at $68.09 on Monday.

Starboard did not say what it would like to see at eHealth but at other companies the firm has often pushed for sales of the company or changes in top management.

As the pace of activism picks up this year after a more subdued 2020, companies can sometimes find themselves targeted by more than one activist investor, bankers have said.

Starboard in particular is known to swoop in on a company that has already battled with a different activist, suggesting it considers itself better able to deliver on proposed changes than other activists can.

It nominated directors at Elanco Animal Health in early March after the company settled for three board seats with Sachem Head Capital last year. Last year Starboard nominated directors at eBay and Commvault, which had each settled with another activist earlier.

(Reporting by Svea Herbst-Bayliss; Editing by Sonya Hepinstall)

[© 2021 Thomson Reuters. All rights reserved.]

Copyright 2021 Reuters. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.  Thompson Reuters is solely responsible for this content.