Microsoft Signs Cooperation Agreement With ValueAct, Agrees To Give A Board Seat


REDMOND, Wash., Aug. 30, 2013 /PRNewswire/ — Microsoft Corp. today announced that it has signed a cooperation agreement with ValueAct Capital, a San Francisco-based investment firm with $12 billion in assets under management that beneficially owns approximately 0.8 percent of the outstanding shares of Microsoft common stock and is one of the company’s largest shareholders.

The cooperation agreement provides for regular meetings between Mason Morfit, president of ValueAct Capital, and selected Microsoft directors and management to discuss a range of significant business issues. The agreement also gives ValueAct Capital the option of having Morfit join the Microsoft board of directors beginning at the first quarterly board meeting after the 2013 annual shareholders meeting.

“Our board and management team are committed to enhancing growth and value for Microsoft shareholders, and we look forward to ValueAct Capital’s input,” said Steve Ballmer, Microsoft chief executive officer.

“Mason has extensive experience as a public company director, a wealth of financial knowledge and the perspective of a major shareholder. We have enjoyed getting to know Mason over the past few months and are looking forward to working with him,” said John Thompson, lead independent director and chair of Microsoft’s Governance and Nominating Committee.

“Microsoft is a world-class company with tremendous long-term potential,” said Morfit. “At this critical inflection point in the company’s evolution, I look forward to actively working together with the board and Microsoft’s management team to continue to create value for all shareholders.”

Morfit is the president of ValueAct Capital. Before joining ValueAct Capital in January 2001, he worked in equity research for Credit Suisse First Boston. Morfit is also a director of Valeant Pharmaceuticals International and a former director of Advanced Medical Optics Inc., C.R. Bard Inc., Immucor Inc., MSD Performance Inc. and Solexa Inc. He has a B.A. from Princeton University and is a CFA charterholder.

The agreement between Microsoft and ValueAct Capital will be included as an exhibit to the Form 8-K filed with the Securities and Exchange Commission.

Founded in 1975, Microsoft (Nasdaq “MSFT”) is the worldwide leader in software, services and solutions that help people and businesses realize their full potential.


SOURCE Microsoft Corp.

  • Yuan Taizong

    A hunt for a new Chief-Executive-Officer, ¿anyone?

  • AS147

    The vultures who have little understanding that you have to spend and speculate to win in IT have swooped in. This is bad news in my book. They have purchased enough stock to get on the board and cause trouble. They will look to reduce the risk profile under the guise of saving money and strangle the company. MS should have resisted this as they have done for so long. I don’t like this one bit. Hope I am wrong.

  • observer2121

    0.8%??? Tell them to get the hell out of here. Not even 1%!!! They only care about short term gains. What is Microsoft thinking?

  • Tips_y

    Isn’t this the same outfit that wanted MSFT to sell off Xbox and some other assets? I smell trouble! This is a multi-billion dollar industry with so much at stake so I wouldn’t be surprised if this outfit is a mole for some shadowy company out to cut MSFT down to size.

    • arrow2010

      I can see the demise of Microsoft very soon as the vultures swoop in to disassemble it to sell-able parts…

      • nohone

        While I don’t see the point of adding another board member because they own 0.8% of the stock, Microsoft already has 9 members on their board of directors. Morfit would be #10. I doubt he would be able to get enough votes to sell off divisions like Xbox.

      • Tips_y

        They can try but not gonna happen at this point. But I guess, they can always dream.

  • grs_dev

    Microsoft’s deal with valueact is the smartest move the board has made in years.

    ValueAct relies on an agitation strategy to shake loose the stock it wants to get into. They do that in the form of public letters to the board and investors. The effects of the letter typically result in doubts on the behalf of some investors who end up dumping the stock based on artificial fears ValueAct created.

    Naturally ValueAct moves right in on the freshly harvested stock at fairly low price point.
    By bringing the president of ValueAct to the table and giving him a seat on the board, Microsoft will have essentially quieted one of it’s biggest wall street critics. With this move, ValueAct could propose its suggestions to the board in secret. The board could tell them NO without repercussions to the stock price or looking as if the company is out of touch.

    I think it’s a great move on the side of Microsoft’s board. I wouldn’t be surprised if it was a prerequisite of one of the potential candidates they’re considering for CEO to address such critics and get them out of the way before handing the new person the keys.

  • Ocelotty1

    And so the End begins :(