Akamai Is Working With Morgan Stanley on Strategic Review

Updated on
  • Internet performance company under pressure from Elliott
  • Paul Singer’s activist firm Elliott owns about 6.5% of Akamai

Akamai Technologies Inc., under pressure from activist investor Elliott Management Corp., is working with financial advisers to explore strategic alternatives including a potential sale, people familiar with the matter said.

The internet-performance company is working with Morgan Stanley on the process, said the people, who asked not to be identified because the matter is private. No decision has been made and the company may choose not to proceed with any strategic changes.

Shares in Akamai rose as much as 5.6 percent in New York Tuesday. They were up 2.4 percent to $67.49 at the close of trading, giving the company a market value of about $11.4 billion.

Representatives for Cambridge, Massachusetts-based Akamai and Morgan Stanley didn’t respond to requests for comment.

Akamai was targeted last month by Elliott, which said it would seek talks with the company about ways to improve shareholder value, including potentially launching a strategic review or a sale process. The investor, led by billionaire Paul Singer, said at the time it owns 6.5 percent of Akamai.

Founded in 1998, Akamai is the world’s largest cloud delivery platform for the internet with 200,000 servers across 130 countries, according to its website. The company helps customers better deliver online content over the internet, from video to software downloads. About a third of its $2.3 billion in 2016 revenue came from its technology for handling media streaming online -- a business that’s been challenged by some of its own customers.

Some of its biggest media customers -- Amazon.com Inc., Apple Inc., Facebook Inc., Alphabet Inc.’s Google, Microsoft Corp. and Netflix Inc. -- are choosing to build some of the tools it offers in-house, according to regulatory filings. That’s curtailed traffic growth and sales, prompting Akamai’s combined revenue from those six users to fall to $250.4 million in 2016 from $379.3 million a year earlier.

— With assistance by Alex Barinka

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