By Svea Herbst-Bayliss
BOSTON (Reuters) – Insurer eHealth Inc sidestepped a possible proxy contest with Starboard Value LP by giving the activist investor one board seat two months after Starboard nominated four directors, two sources familiar with the matter said.
The two sides settled on handing the seat to James Murray, president and chief operating officer at Magellan Health Inc. He was one of Starboard’s nominees.
Starboard, which owns 7% of eHealth, said in a regulatory filing in March that it felt the company’s stock was undervalued. At that time, eHealth said it had held discussions with the activist and was “open minded.”
Starboard’s nominations came after eHealth had settled with another activist, Hudson Executive Capital, which had also said the share price was undervalued.
The stock price has fallen 13% since January, closing at $61.39 on Wednesday.
EHealth has been run by Scott Flanders since 2016 and during this tenure, the stock price has climbed 365%.
During the first quarter of 2021, Starboard launched two new campaigns and won five board seats.
(Reporting by Svea Herbst-Bayliss; Editing by Lincoln Feast.)
