(Bloomberg) — Activist investor Starboard Value disclosed a position in Mercury System Inc. and urged it eliminate or revise its poison pill, ratcheting up the pressure on the U.S. defense electronics manufacturer, which is already facing calls to explore a sale.
Starboard said in a letter to Mercury’s board Thursday that it owned a 7.3% stake in the company, and urged it to eliminate its shareholder rights plan, which makes it difficult for anyone to build a large stake in the company.
The New York-based hedge fund, which is run by Jeff Smith, said that if the company is unwilling to revoke the poison pill, it should raise the ownership limit that triggers it from 7.5%, or 10% in the case of passive investors, to 15% for everyone. It should also put the revised plan to a shareholder vote.
A representative for Mercury wasn’t immediately available for comment.
Starboard is the second activist investor to disclose a stake in Mercury. Barry Rosenstein’s Jana Partners disclosed a stake in the company in December and has been pushing it to explore as sale, Bloomberg News reported.
Mercury Systems is one of the last remaining independent public suppliers of sophisticated electronics for the aerospace and defense industry after a wave of consolidation in the sector. Last March, private equity firm Veritas Capital agreed to sell Abaco Systems Inc. to Ametek Inc. in deal valued at $1.35 billion, following FLIR Systems’ agreement in January of last year to sell to Teledyne Technologies Inc.
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