JDS Uniphase Activist Sandell Pushes Board to Ease Nominee RulesBeth Jinks
Sandell Asset Management Corp., the activist shareholder that pushed JDS Uniphase Corp. to split into two businesses, is demanding the board ease bylaws that make it difficult for shareholders to nominate directors and mount proxy fights.
Sandell, in an open letter dated Jan. 13, foreshadowed further action should JDS keep a nomination window that can leave shareholders only a day to submit alternative directors. Sandell had earlier attacked JDS’s “troubling governance practices” and last year helped convince holders of 34 percent of the company’s shares to vote against Martin Kaplan, director and governance committee chairman.
“While we would much prefer to resolve these matters amicably, we are prepared to take further, affirmative steps to ensure that the company’s bylaws no longer have a chilling effect on the exercise of shareholder rights,” Sandell wrote. “We would like formal evidence of such amendment to be filed publicly within the next two weeks.”
Sandell is pushing JDS to seek a buyer for its optical component and commercial-laser unit as the company also pursues a spinoff. The New York-based hedge fund, which has said it holds a “significant” stake in JDS Uniphase, also wants the Milpitas, California-based company 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 have said.
Created in 1999 through the $7.05 billion merger of two companies, Uniphase Corp. and Canada’s JDS Fitel Inc., JDS Uniphase at the time became the biggest maker of components for the fiber-optic equipment used in telecommunications networks.
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.