ComScore Inc. (SCOR) shares were up on Wednesday after Starboard Value's Jeff Smith launched an activist campaign at the media measurement and analytics company by filing a lawsuit to compel it to hold an annual meeting.
The campaign comes after ComScore hasn't held an annual meeting since July 21, 2015. Smith's lawsuit, filed in Delaware Chancery Court, seeks to pressure the company to schedule its annual meeting, arguing that it is violating its own corporate regulations, according to reports.
Starboard owns a 4.9% stake. Its shares were trading at $27.90 a share, up about 2%.
There's a good likelihood that the activists will win the case. The courts in Delaware - where ComScore is incorporated and over half of all U.S. corporations are incorporated - have generally set 13 months as the longest they would accept between annual meetings in most circumstances.
The company, which has a $1.6 billion market capitalization, was de-listed from the Nasdaq stock market earlier this year. In December, its co-founder Magid Abraham resigned from the board following an internal examination of its financial statements.
It is very likely that Starboard will seek to nominate a slate of dissident director candidates should it succeed at compelling ComScore to hold its annual meeting. The activist fund has launched 136 campaigns including 62 director-election proxy fights since 1999.
In June, ComScore it appointed five new members to its board of directors, including Lisa Gersh, former CEO of Martha Stewart Living Omnimedia. As a result, a number of directors have installed without being approved by shareholders.
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