JDSU Activist Said to Plan Voting Against Some Directors

Sandell Asset Management Corp., the activist shareholder that pushed JDS Uniphase Corp. to split into two businesses, now plans to vote against some of the company’s board nominees at a shareholder meeting next month.

Sandell, which has said it holds a “significant” stake in JDS Uniphase, will also escalate its campaign for changes at the the Milpitas, California-based company by reaching out to other shareholders and soliciting their support with the help of Okapi Partners LLC, according to a statement today.

The moves come after recent talks with JDS Uniphase Chief Executive Thomas Waechter and board member Thomas Waechter have “proved futile,” Sandell said in today’s statement.

Sandell is pushing JDS to seek a buyer for its optical component and commercial laser unit and has submitted a shareholder proposal formally asking the board to evaluate additional strategic options. The New York-based hedge fund also wants JDS Uniphase to extract tax benefits from operating losses.

JDS Uniphase said Sept. 10 it would split into two businesses -- one focusing on optical components and commercial lasers and the other selling network-testing equipment. Sandell had been pushing the company for months leading up to the split announcement, people with knowledge of the matter said in September.

Potential Value

Sandell estimates the potential value of JDS Uniphase’s business segments, and the tax assets, is between $19 and $26 a share. JDS Uniphase ended trading last week at $13.63 a share, giving it a market value of about $3.2 billion.

Created in 1999 through the $7.05 billion merger of two companies, Uniphase Corp. and Canada’s JDS Fitel Inc., JDS Uniphase became the biggest maker of components for the fiber-optic equipment used in telecommunications networks at the time. That deal was followed by a series of acquisitions, including the $15.5 billion purchase of E-Tek Dynamics Inc. and SDL Inc. for $41 billion, both in 2000.

Sandell was founded by investor Thomas Sandell in 1998. Activist investors agitate management and directors of targeted companies to make changes they believe will boost returns for shareholders.

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