Olive Garden Activist Wants a Board Seat at Drugmaker

Jeffrey Smith, chief executive officer and chief investment officer at Starboard Value LP, speaks during the Bloomberg Hedge Funds Summit in New York, U.S., on Wednesday, December 5, 2012. The Bloomberg Hedge Funds Summit convenes managers and investors to discuss the impact of the European debt crisis on the global markets and break down the fundamentals driving volatility in the equity markets. Photographer: Michael Nagle/Bloomberg via Getty Images

Photograph by Michael Nagle — Bloomberg via Getty Images

Activist investor StarBoard Value on Thursday formally called for a special meeting of Depomed shareholders as it looks to replace the drugmaker’s board.

Starboard, which has a 9.9% stake in Depomed (DEPO), criticized the drugmaker’s board last month over corporate governance deficiencies and urged it to explore a sale.

The hedge fund had also said Depomed had taken a “series of shareholder-unfriendly steps,” referring to the company’s decision to reject takeover offers from Horizon Pharma last year.

The company, in response, had given StarBoard 30 days to formally request a meeting, to be held within 35-to-60 days after the submission of the request.

StarBoard said on Thursday it had selected a group of six nominees to Depomed’s board, including Chief Executive Jeffrey Smith and Peter Lankau, a former CEO of Endo International.

Depomed was not immediately available for comment.

Depomed’s shares were little changed at $20 in morning on Thursday. Up to Wednesday’s close, the shares had risen 39% since StarBoard disclosed its stake in the company in April.