Jan 24 Jana Partners LLC has taken a large stake
in Juniper Networks Inc, a move that comes at a time
when the network gear maker is being urged by one of its
prominent investors to increase shareholder returns.
Intensifying competition among U.S. telecom companies to
expand their offerings has been a boon for network equipment
makers such as Juniper, Riverbed Technology Inc and F5
Networks Inc, which has in turn caught the attention of
Hedge fund Jana did not disclose the quantum of its
investment in Juniper, but said it is now one of the largest
shareholders in the company, according to a letter to investors
that was seen by Reuters.
Jana estimates Juniper could potentially save $300 million
by implementing certain business plans it suggested. It also
wants the tech firm to start paying out dividends, a demand also
echoed by peer Elliott Management Corp, which disclosed a 6.2
percent stake in Juniper.
Elliot, run by Paul Singer, had earlier urged Juniper to buy
back shares, start paying a dividend and consider cutting costs.
Elliot said the "undervalued" stock could be worth $35-$40
if Juniper implemented its suggestions and focused on revamping
its core business of making routers and switches for mobile
carriers such as Verizon Communications Inc and AT&T Inc
Jana said in the letter that it has been talking to Juniper
management to explore ways to unlock "shareholder value" and has
cited management compensation as an area of reform. The hedge
fund also suggested addition of new directors to the company's
A Juniper spokeswoman told Reuters in an email that the
board and management team have been comprehensively analyzing
the company's priorities for some time and are finalizing the
review "with a sense of urgency."
"We look forward to presenting the details of our integrated
operating plan as we finalize them in the coming weeks. We
intend to continue a constructive dialogue with our
shareholders, as well as our customers, partners and employees,"
the spokeswoman said.
Last week, Riverbed Technology rejected Elliott Management's
$3.08 billion bid, saying the offer did not reflect the
company's success in turning around its business.