* Starboard plans to file its slate of directors 'promptly'
* Wants AOL to give all of patent proceeds to shareholders
* Concerned about Patch and display ad business
* AOL shares down 3 percent
April 10 Starboard Value is not satisfied with
AOL's $1 billion deal to sell the majority of patents to
Microsoft Corp and plans to press forward with its
slate of nominees for the company's board, the activist
investment fund said.
In a letter to the AOL Inc board released on
Tuesday, Starboard said that while it was pleased with the
patent sale, it did not address "serious concerns" with AOL's
"poor operating performance."
Starboard, which with a 5.3 percent stake in the Internet
company is one of its largest shareholders, has been agitating
for a shakeup. One of the paths it wanted AOL to pursue was an
auction of its patents.
On Monday, AOL said it was selling the majority of its
patents to Microsoft for $1 billion and that it would return a
"significant portion" to shareholders.
Starboard said AOL should return all the proceeds to its
A representative from AOL was not immediately available to
"We remain concerned that shareholder capital will continue
to be used for poorly conceived acquisitions and investments
into money-losing initiatives," according to the letter.
Starboard singled out Patch, a group of community news
websites, and AOL's splashy display ad business.
The investment fund said that it was planning to "promptly"
file preliminary proxy materials for its board slate.
Shares of AOL, which jumped more than 40 percent on Monday
after the patent sale announcement, were down 3 percent at
$25.62 in morning trading on Tuesday.