March 12 (Reuters) - Hedge fund Engaged Capital started a proxy fight against digital television guide provider Rovi Corp on Thursday after months of stalled talks over company strategy, cost structure and other issues.
Engaged said in a letter that it was nominating four candidates for Rovi’s board.
Rovi has hired investment bank Credit Suisse to help defend itself against Engaged, according to a source familiar with the matter.
Reuters reported last month that Rovi was looking to hire an adviser after Engaged increased pressure in recent months on the company to make changes to its strategy.
Rovi also received interest from private equity firms for its assets, sources previously told Reuters. These discussions have been focused on a potential sale either of the entire company or of parts, these sources said at the time. It is unclear if the company is currently open to a sale.
Engaged has held discussions with Rovi, which has a market capitalization of $2.2 billion, over its capital allocation, executive compensation and corporate governance. The hedge fund said it was frustrated with Rovi’s lack of progress in finding new directors.
Rovi responded in a statement that Engaged is attempting to seize control of the company without paying a premium .
Newport Beach, California-based Engaged, led by Glenn Welling, holds a 0.6 percent stake in Rovi, according to Thomson Reuters data. (Reporting by Liana B. Baker in New York and Devika Krishna Kumar in Bengaluru; Editing by Lisa Von Ahn)