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July 1, 2008
Like Chicago Cubs fans, Sonus Networks Inc. (Nasdaq: SONS)'s largest investor, Legatum Capital, is tired of "waiting 'til next year."
In a letter to CEO Richard Nottenberg, Legatum's president, Mark Stoleson, expressed his firm's frustration with the company's leadership that has led to a five-year low in the vendor's stock price. He also stated that Legatum was not interested in pursuing a hostile takeover bid for 100 percent ownership of the company.
"Although you personally are a recent arrival at the company, it is important that you understand that many of the governance issues are long overdue to be addressed, and that shareholders are no longer willing to be brushed off with assurances that all will be well next year. There have already been too many 'next years' that have gone unfulfilled," wrote Stoleson in the letter.
Legatum's letter was provoked by Sonus's decision to activate a poison pill late last week in order to ward off a hostile takeover bid from the activist investor. (See Sonus Preps Poison Pill.) Legatum is calling the notion that it wants full ownership of Sonus ludicrous.
Legatum first began its clash with Sonus two weeks ago when it announced it would be withholding its vote in the annual shareholder meeting because it was unhappy with the performance of the company's current leadership. (See Legatum Slams Sonus.) Sonus Chairman Hassan Ahmed fired back with a letter of his own expressing disappointment in Legatum's words. (See Sonus Responds to Legatum.)
The two sides tried to make nice. (See Sonus Engages With Legatum.) But Sonus felt it needed to enact a "poison pill" shareholder rights plan.
Legatum is essentially accusing Sonus of not wanting folks to know more about its daily operations. Stoleson's letter to the Sonus CEO says his firm is "at a loss to understand why you claim to be so threatened by the introduction of normal levels of transparency and accountability."
Sonus did not immediately respond to requests for comment.
Separately, Sonus saw further shakeup in its executive staff Monday as Jocelyn Philbrook, VP of corporate marketing and investor relations, left the company. (See Another Sonus VP Splits.)
Shares of Sonus closed down $0.10 (2.84%) Monday to $3.42 on higher than average volume.
— Raymond McConville, Reporter, Light Reading
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