Exclusive: Box explores the sale amid pressure from starboard sources

(Reuters) – American cloud services provider Box Inc is exploring a sale amid pressure from the hedge fund Starboard Value LP on the performance of its shares, according to people familiar with the matter.

Box, based in Redwood City, Calif., Discussed a possible deal with interested buyers, including other private equity firms and firms, the sources said, warning that no sale of the company is certain.

The sources requested anonymity because the matter is confidential. Box declined to comment.

Box’s shares rose up to 17% with the news, to $ 26.47, giving the company a market value of about $ 4.3 billion. DA Davidson analyst Rishi Jaluria wrote in a research note on Monday afternoon that Box could earn more than $ 34 a share in a sale.

Reuters reported last month that Starboard was preparing to launch a board challenge against Box, unless it took steps to increase shareholder value. In particular, he expressed disappointment that the company was unable to capitalize on the work at home trend during the COVID-19 pandemic, as many of its cloud computing colleagues did.

Its shares are currently traded at around $ 22 each, just slightly higher than the price for which it debuted on the New York Stock Exchange in January 2016.

Box said last week that it would extend the deadline for appointing directors to its board from mid-April to 11 May.

Founded in 2005, Box’s offering includes file sharing, cloud storage and cloud backup. Demand for secure file sharing and other collaboration services in the workplace has increased since the beginning of COVID-19, driven by the information technology needs of companies whose employees work from home.

Although Box has benefited from this trend, it has struggled to fully capitalize on it, as some of its services and products are offered by competitors such as Microsoft Corp for free or at a lower cost.

Box earlier this month reported fourth quarter earnings that exceeded analysts’ expectations.