Starboard Value LP didn’t launch a director contest at Green Dot Corp. (GDOT), but the activist fund likely played a major role in the financial technology company’s move to install a new CEO and director this month.
On Wednesday the Pasadena, Calif., company announced it was installing Dan Henry, a former CEO of prepaid debt cards provider NetSpend Corp., as CEO.
In a statement, Green Dot said it wanted to thank its consultants and stakeholders, including Starboard Value, for their support and guidance during its search process.
Shares of the reloadable prepaid debit card company have been battered by the coronavirus-driven crisis and traded Wednesday afternoon at $24.68, down nearly 58% over the past 12 months despite a 17.8% surge Wednesday.
Starboard reported a 9.3% stake in Green Dot on Feb. 3 in an activist filing, which noted it might engage in discussions with shareholders or the company about a variety of subjects including the potential for business combinations or changes to its ownership structure.
The fund didn’t launch a director contest. On March 9, though, the date of the deadline for nominating directors, Green Dot announced it was adding No Street Capital founder Jeffrey Osher to its board. The timing suggests that Starboard, which frequently seeks to install director candidates in proxy fights, played a central role in Osher’s selection.
In addition, Starboard likely was involved in the CEO choice. According to relationship mapping service, BoardEx, a sister company to The Deal, Henry and Starboard managing member Peter Feld both served as independent directors at Brinks Co. (BCO) for part of October and November 2017. During that period, Feld was stepping down from his board service while Henry was beginning his directorship, which continues today.
One proxy solicitor noted that as the coronavirus pandemic expands, companies and activists are reaching deals privately as both sides seek to minimize the extensive costs of public director contests. He noted Green Dot may be a good example of such a situation and that the technology company and Starboard likely were able to reach an agreement outside of the public sphere.
When the markets stabilize, Starboard possibly could push for Green Dot to consider some M&A. Henry has some experience in that regard. In July 2013, he led NetSpend into an all-cash sale of the company to Total System Services Inc. valued at $1.4 billion.
In addition, Canaccord Genuity Capital Markets analyst Joseph Vafi wrote in a March 8 research report that Jack Dorsey’s Square Inc. (SQ) could consider buying Green Dot to hasten its entry into enterprise payments. Green Dot could enable Dorsey to move more rapidly into the $25 trillion business-to-business payments marketplace, the analyst noted.
SunTrust Robinson Humphrey Inc. analyst Andrew Jeffrey wrote in a February 2019 note that “Green Dot’s bank and tech platform is desirable.”
Starboard and Green Dot did not return requests for comment.
—Chris Nolter contributed to this report
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