Mellanox Retains adviser to Explore Sale
Israeli-based Mellanox is a chips and hardware manufacturer serving primarily cloud computing-powered data center servers. Its market cap stands at approximately $4 billion.
Multinational supplier of computer networking products Mellanox Technologies has retained a financial adviser to explore the sale of the company, CNBC reported.
According to sources familiar with the situation, at least two companies are interested in acquiring Mellanox.
Although takeover discussions are underway and in early stages, there is still a chance the deal falls apart.
Israeli-based Mellanox is a chips and hardware manufacturer serving primarily cloud computing-powered data center servers. Its market cap stands at approximately $4 billion.
Among Mellanox’s shareholders is New York-based investment adviser and activist investor Starboard Value. The shareholder has previously expressed concerns about the fact that the chip maker rebuffed a potential merger with storage, communications and consumer semiconductor products producer Marvell Technology Group.
Starboard owned a 10.7% stake in Mellanox. However, since it initially disclosing its stake last year, Starboard has cut its ownership in the semiconductor company to about 8.6% in July. Starboard is still Mellanox’s largest shareholder.
Prior to the proxy contest, the activist said that the stock’s performance has led to a “crisis of confidence among investors and has contributed to Mellanox trading at a meaningful discount to its peers.”
In January 2018, Starboard nominated a full slate of directors for election to the board of Mellanox.
However, the parties settled in June, with Mellanox appointing Jon Olson, Greg Waters, and Jack Lazar to its board. Olson and Waters are independent directors recommended by Starboard, while Lazar was mutually agreed upon by the parties.
Mellanox’s shares are up 65% since Starboard first disclosed its ownership in November 2017.