(Reuters) – US cloud service provider Box Inc is investigating a pressure sale of hedge fund Starboard Value LP over its stock performance, according to people familiar with the case.
Redwood City, California-based Box, has discussed a possible deal with interested buyers, including other companies and private equity firms, the sources said, warning that no sale of the company is certain.
The sources asked for anonymity as the matter is confidential. Box declined to comment.
Box shares were up a whopping 17% on the news to $ 26.47, bringing the company a market value of about $ 4.3 billion. DA Davidson analyst Rishi Jaluria wrote in a research note Monday afternoon that Box could fetch more than $ 34 a share on a sale.
Reuters reported last month that Starboard was preparing to launch a board challenge against Box unless it took steps to increase shareholder value. It has privately expressed disappointment that the company has failed to capitalize on the trend of working from home during the COVID-19 pandemic, as many of its cloud computing colleagues have done.
The stock is currently trading at around $ 22 each, only marginally higher than the price at which it debuted on the New York Stock Exchange in January 2016.
Box said last week that it would extend the deadline for appointing directors from mid-April to May 11.
Founded in 2005, Box includes file sharing, cloud storage and cloud backup. The demand for secure file sharing and other workplace collaboration services has grown since the inception of COVID-19, driven by the information technology needs of companies whose employees work from home.
Box has taken advantage of this trend but is struggling to take full advantage of it as some of its services and products are offered for free or at a lower cost by competitors such as Microsoft Corp.
Box reported fourth-quarter earnings earlier this month that exceeded analyst expectations.
Reporting by Greg Roumeliotis in New York and Joshua Franklin in Boston; Editing by Nick Zieminski