(Reuters) – US cloud service provider Box Inc is investigating a sale amid pressure from hedge fund Starboard Value LP over its stock performance, according to people familiar with the matter.
The sources in Redwood City, California, discussed a potential deal with interested buyers, including other companies and private equity firms, the sources said, warning that no sale of the company is certain.
The sources asked for anonymity because the case is confidential. Box declined to comment.
Box shares rose 17% to $ 26.47 on the news, giving the company a market value of about $ 4.3 billion. DA Davidson analyst Rishi Jaluria wrote in a research note on Monday afternoon that Box could fetch more than $ 34 per share in a sale.
Reuters reported last month that Starboard was ready to take on a board challenge against Box unless it takes steps to increase shareholder value. It expressed private disappointment that the company could not take advantage of the work-from-home trend during the COVID-19 pandemic, as many of its peers in cloud computing did.
Its shares are currently trading at about $ 22 apiece, just slightly higher than the price at which they started trading on the New York Stock Exchange in January 2016.
Box said last week he would extend the deadline to appoint directors to the board from mid-April to May 11.
Box’s offering, established in 2005, includes file sharing, cloud storage, and cloud backup. Demand for secure file sharing and other collaboration services in the workplace has risen since the inception of COVID-19, driven by the information technology needs of companies whose employees work from home.
Although Box has benefited from this trend, it has struggled to take full advantage of it, as some of its services and products are offered for free or at a lower cost by competitors such as Microsoft Corp.
Box reported fourth-quarter earnings earlier this month that beat analysts’ expectations.
Reporting by Greg Roumeliotis in New York and Joshua Franklin in Boston; Edited by Nick Zieminski