Depomed Welcomes Communications With Shareholders; Stock Surges

(RTTNews) - In response to the Schedule 13D filed April 7 with the Securities and Exchange Commission by Starboard Value LP, Depomed, Inc. (DEPO) said it welcomes open communications with its shareholders and values constructive input toward the goal of enhancing shareholder value.

In pre-Market trade, DEPO is currently trading at $17.20, up $2.20 or 14.67%.

Depomed noted that Starboard has not communicated with the Company prior to filing the 13D and has not attempted to hold any discussions with the Company. Depomed's Board and management are committed to creating value for all Depomed shareholders.

The Depomed Board of Directors recommends that shareholders take no action at this time.

Separately, Starboard Value LP , one of the largest shareholders of Depomed with an ownership interest in approximately 9.8% of Depomed's outstanding shares, announced it has delivered a letter to President and CEO, Jim Schoeneck, and the Depomed Board of Directors.

Starboard believes that Depomed is deeply undervalued and that significant opportunities exist to create value for the benefit of all shareholders based on actions that should be within the control of management and the Board of Directors.

Starboard said it has significant concerns regarding serious corporate governance deficiencies, questionable capital allocation decisions, and egregious actions taken by the Board to stymie strategic interest in acquiring Depomed.

Starboard noted that it acquired its position in Depomed because it believes that the Company is substantially undervalued and opportunities exist to create significant value for shareholders. This includes an opportunity to improve capital deployment, rationalize research and development, and explore a potential sale of the Company given potential operating, financial, and tax synergies.

Starboard said it intends to vigorously oppose the current version of the Reincorporation Proposal, and advises other shareholders to fully consider these provisions and the significant ramifications they would have on shareholder rights. Starboard said it has little choice at this time but to immediately commence the process to call a special meeting of shareholders in order to preserve rights under California law and Depomed's current bylaws.

Given that the Reincorporation Proposal was publicly disclosed only three days ago on April 5, 2016, and Starboard's view that the members of the Board will go to any length to entrench themselves, out of an abundance of caution, Starboard is immediately nominating six individuals, five of whom are Starboard Value investment professionals.