Company Update (NASDAQ:DEPO): Depomed Inc and Starboard Announce Settlement Agreement

Depomed, Inc. Logo.  (PRNewsFoto/Depomed, Inc.)

Depomed Inc (NASDAQ:DEPO) announced that it has entered into a settlement agreement with its second largest shareholder, Starboard Value LP (together with its affiliates, “Starboard”), regarding the composition of the Depomed Board of Directors. Starboard has agreed to withdraw its proxy solicitation and Special Shareholder Meeting request, thereby cancelling the previously scheduled November 15, 2016Special Shareholder Meeting.

Under the terms of the Agreement, three independent directors appointed by Starboard, James P. Fogarty, Robert G. Savage and James L. Tyree, will join the six current directors on Depomed’s Board.

“We are pleased to have reached this agreement with Starboard, which we believe is in the best interests of our shareholders,” said Jim Schoeneck, President and CEO of Depomed. “We are confident that we are aligned to deliver significant value to our shareholders.”

In connection with entering into the Agreement, the Board amended the Company’s Bylaws (“Bylaws”) to move the window for shareholders to make nominations of directors at, and bring other shareholder proposals before, the 2017 Annual Meeting of Shareholders to March 15, 2017 through April 15, 2017. As part of the Agreement, Starboard, which is a 9.8% shareholder in the Company, has agreed to certain standstill restrictions until the beginning of this nomination period.

“We are pleased to have reached an agreement to work with Depomed.  We believe the addition of these three highly qualified directors will add to the experience in the boardroom and expect that the board and management team will focus on delivering significant value for shareholders,” said Jeffrey C. Smith, Chief Executive Officer and Chief Investment Officer of Starboard Value. (Original Source)

Shares of Depomed closed today at $23.83, down $0.26 or -1.08%. DEPO has a 1-year high of $27.02 and a 1-year low of $12.25. The stock’s 50-day moving average is $22.64 and its 200-day moving average is $19.53.

On the ratings front, Depomed has been the subject of a number of recent research reports. In a report issued on October 14, Janney Montgomery Scott analyst Ken Trbovich reiterated a Buy rating on DEPO. Separately, on the same day, Roth Capital’s Scott Henry reiterated a Buy rating on the stock and has a price target of $28.

According to, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Ken Trbovich and Scott Henry have a total average return of 49.6% and 2.8% respectively. Trbovich has a success rate of 58% and is ranked #82 out of 4180 analysts, while Henry has a success rate of 41% and is ranked #1085.

Overall, 5 research analysts have assigned a Hold rating and 4 research analysts have given a Buy rating to the stock. When considering if perhaps the stock is under or overvalued, the average price target is $25.60 which is 7% above where the stock opened today.

Depomed, Inc. is a pharmaceutical company, which manufactures and distributes pharmaceutical products to treat pain and other central nervous system conditions. Its brands include Gralise, Zipsor, Lazanda, Cambia, NUCYNTA ER and NUCYNTA. 


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