(Bloomberg) — Vonage Holdings Corp., under pressure from activist investor Jana Partners, is working with advisers to run a strategic review of the business, including a potential sale of the telecommunication services company, according to people familiar with the matter.
The company said in February it was terminating a sales process for its consumer business after a nine-month strategic review. Since then, Jana, the New York-based hedge fund run by Barry Rosenstein, has acquired a roughly 4% stake in Vonage and has called on it to hire advisers and explore selling all or parts of the company, Bloomberg News reported reported last month.
It’s still early in the process and Vonage might choose not to pursue a sale or breakup, the people said, asking not to be identified because the matter is private.
A representative for Vonage declined to comment.
Shares of Holmdel, New Jersey-based Vonage had previously gained about 16% this year. They rose as much as 13% Monday and closed up 4.4% to $15.12, giving the company a market value of $3.8 billion.
Vonage said its decision to call off the sale of its consumer business earlier this year was driven by valuation, the $600 million of cash generation it expected over the next five years from the division, and what it said was in the best interest of the company and its shareholders.
Last month, Vonage reported second-quarter results that beat analysts’ expectations. It also boosted its revenue forecast for the year by about 2.2% to as much as $1.39 billion.
Jana has a history of pushing for breakups or sales of companies, including most recently at Laboratory Corp. of America Holdings and Encompass Health Corp. Both LabCorp and Encompass are conducting strategic reviews.
(Updates with closing share price in fifth paragraph)
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