AMSTERDAM, The Netherlands – Wireless chipset vendor DSP Group Inc. (San Jose, Calif.) has sent an open letter to its shareholders stating that Starboard Value LP, a New York-based investment advisor, has told the company it will initiate an election contest for control of the board unless certain demands are met.
Starboard owns approximately 10 percent of DSP Group's shares, and is also an investor in packaging IP firm Tessera Technologies Inc. (San Jose, Calif.), where it is also involved in verbal sparring over the direction that company should be taking.
In the letter to DSP Group shareholders – from chairman Eliyahu Ayalon and CEO Ofer Elyakim – the company states that Starboard has made demands in terms of additional board representation and seats on board committees that "could effectively give Starboard control of the company, despite Starboard's ownership of only approximately 10 percent of the company's stock."
Starboard is also demanding that DSP Group cease work on the development of new products, focus on legacy technology and put the company up for sale, the letter states.
The DSP Group executives dismissed the demands from Starboard, which already has two of its nominees on the board of directors, but did make the offer allowing Starboard Value CEO Jeff Smith to join the board.
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