Dublin-based consumer health and generics group Perrigo is shaking up its board and replacing half of its directors with members tied to an activist investor. Starboard Value targeted the drugmaker last year and urged it to explore a sale of its prescription business.
The board will have five new members, including Starboard chief executive Jeffrey Smith and Pfizer's former chief executive Jeff Kindler, Perrigo said. Starboard owns about 6.7 per cent of the stock, according to its statement.
Shares in the firm rose 0.6 per cent to $78.56 at 9:44am in New York. They had slumped 46 per cent over the past year.
Starboard disclosed a stake in Perrigo last September, just months after chief executive John Hendrickson took over and started a strategic review.
The investor criticised the drugmaker for making financial missteps since rebuffing a takeover offer from Mylan in 2015. In addition to divesting the prescription unit, which sells generic drugs, Starboard said Perrigo should consider selling its royalty interest in multiple sclerosis therapy Tysabri.
Mr Hendrickson replaced former chief executive Joe Papa, who left for Valeant Pharmaceuticals in April after transforming Perrigo into a giant maker of generic and over-the-counter medicines through a series of deals.
In an interview in October, Mr Hendrickson said that selling off the generics division would be complicated because it ties into all of the company’s other businesses. The strategic review is expected to finish during the first quarter.
Starboard holds activist stakes in companies ranging from Depomed, a maker of opioid painkillers, to retailer Macy's, security group Brink's and vehicle parts supplier Advance Auto Parts, according to its latest filing. Its highest profile target, Yahoo!, agreed to sell its main web business to Verizon in July. The sale came almost three years after the hedge fund went public with its campaign, and three months after Yahoo agreed to put Smith and three aligned directors on its board.
Among the new Perrigo board members is Bradley Alford, a partner at Advent and former chief executive of Nestle's US division. Two other directors will be named later, while five current members will step down.
The board members leaving are Michael Jandernoa, Gary Kunkle, Herman Morris, and Shlomo Yanai. Ellen Hoffing will step down after the second additional Starboard director is appointed.