(Reuters) - Drugmaker Perrigo Co Plc struck a deal on Tuesday with Starboard Value LP, agreeing to add three directors to the board as the activist hedge fund ramps up pressure on the company.
Starboard’s CEO and founder Jeffrey Smith, Advent International operating partner Bradley Alford and Lux Capital partner Jeffrey Kindler were appointed to the board on Tuesday.
The agreement also allows Starboard, which owns 6.7 percent of Perrigo, to recommend two additional independent directors to the board. Prior to the deal, Perrigo’s board was comprised of seven members.
Starboard announced its stake last September, saying at the time that Perrigo should explore the sale of its prescription pharma business, known as Rx Pharmaceuticals, and the sale of its royalty stream from the drug Tysabri, used to treat multiple sclerosis.
Two months later, Perrigo said it was reviewing Tysabri’s sale, with Morgan Stanley acting as its adviser.
Tysabri’s sale process is ongoing, according to a person familiar with the matter. Perrigo is not currently seeking the sale of Rx Pharmaceuticals, the person added.
Starboard has also criticized the company for walking away from a $205-per-share offer from generic drug maker Mylan NV in late 2015.
Perrigo’s stock was up 0.6 percent at $78.54 per share on Tuesday, roughly half the price it was trading a year ago and in line where it traded when Starboard arrived.
The company, which specializes in generic and over-the-counter drugs, said directors Herman Morris, Shlomo Yanai, Michael Jandernoa and Gary Kunkle will step down, effective immediately.
Perrigo is Starboard’s largest stock holding, according to the firm’s quarterly filing, worth around $550 million as of Sept. 30 of last year. Its second largest is Internet company Yahoo Inc., where it has around a $500-million position and where Smith was made a director last year after agitating for the company’s sale.
Perrigo’s deadline for nominating directors expires on Feb. 15, according to its annual proxy statement.
Additional reporting by Ankur Banerjee in Bengaluru; Editing by Shounak Dasgupta and Nick Zieminski