(Reuters) -Activist investor Engine Capital is gearing up for a proxy battle at Lyft, because it prepares to appoint two administrators to the board of the ride-hailing firm.
The hedge fund, which owns about 1% of Lyft, mentioned on Wednesday it’s set to appoint Alan Bazaar and Daniel Silvers for election to the board of the corporate, which has underperformed rival Uber Applied sciences and the broader market.
“There may be an pressing want for shareholder-driven change in Lyft’s boardroom, which is sadly dominated by misaligned founders and unbiased administrators with inadequate public market expertise,” mentioned Arnaud Ajdler, Engine Capital’s founder and portfolio supervisor.
Lyft’s shares rose about 1% on Wednesday, after it introduced its entry into European markets by buying Germany’s FreeNow mobility platform for almost $200 million.
Reuters first reported about Engine Capital nominating administrators at Lyft final month.
The corporate mentioned it has been partaking with Engine Capital for months however decided its nominees wouldn’t add new abilities to the board.
Engine Capital criticized Lyft’s dual-class share construction, which provides founders, who collectively personal lower than 2.5% of the corporate, about 30% of voting energy. The activist additionally highlighted damaging shareholder returns previously 5 years.
Lyft has a market worth of about $4.6 billion, in comparison with bigger rival Uber’s $155 billion.
Whereas Uber expanded internationally and diversified into meals supply and different companies, Lyft has maintained its give attention to the North American ride-hailing market.
Engine Capital mentioned it had tried to have interaction privately with Lyft’s management in current months, providing “value-enhancing concepts” and suggesting director candidates with public market expertise, however was rebuffed.
In accordance with the activist, Lyft’s nominating and company governance committee didn’t provide to interview its nominees.
Lyft at present has a 10-member board, with 4 administrators standing for election at this yr’s annual assembly. The corporate requires shareholders to personal at the least a 1% stake to appoint administrators, in keeping with a regulatory submitting final yr.
(Reporting by Akash Sriram in Bengaluru; Modifying by Shilpi Majumdar)
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