Activist investor Ancora Holdings is preparing to challenge for seats on the board of directors of Harmonic, in a push to get the streaming equipment company to divest its video business faster, according to a Reuters report.
The report cites people familiar with the matter as saying that Ancora, which first invested in Harmonic in 2019 and is a top 10 shareholder, has identified candidates for a slate it plans to nominate to the San Jose, California-based company’s board.
Ancora is pushing Harmonic, which has a market capitalization of about $1.4 billion, to use the proceeds from the sale of the video business for share buybacks, the sources said.
Harmonic’s board director nomination window opens on Feb. 24. It is possible that Ancora will not proceed with the challenge if Harmonic cuts a deal that addresses the hedge fund’s concerns about the board’s composition, the sources said.
The report noted that Harmonic’s shares have shed more than 20% of their value since the company said during its second-quarter earnings on July 31 that hardware sales delays would lead to revenue coming in below its expectations, while industry analysts have said large streaming players, video operators and private equity firms could be interested in the video unit.
