(Reuters) – US cloud service provider Box Inc is exploring a sale amid pressure from Starboard Value LP hedge fund on the performance of its shares, according to people familiar with the matter.
Box, based in Redwood City, California, discussed a potential deal with interested buyers, including other companies and private equity firms, sources said, warning that no sale of the company is safe.
Sources requested anonymity because the matter is confidential. Box declined to comment.
Box shares rose up 17% on news to $ 26.47, giving the company a market value of about $ 4.3 billion. DA Davidson analyst Rishi Jaluria wrote in a research note Monday afternoon that Box could bring in more than $ 34 a share in a sale.
Reuters reported last month that Starboard was preparing to launch a challenge against Box, unless it took steps to increase shareholder value. Privately, he expressed disappointment that the company failed to capitalize on the trend of working from home during the COVID-19 pandemic, as did many of its cloud computing colleagues.
Its shares are currently trading at about $ 22 a piece, only marginally higher than the price at which it debuted on the New York Stock Exchange in January 2016.
Box said last week that it would extend the term of office of directors on its board from mid-April to May 11.
Founded in 2005, the Box offering includes file sharing, cloud storage, and cloud backup. The demand for secure file sharing and other workplace collaboration services has increased since the advent of COVID-19, driven by the information technology needs of companies whose employees work from home.
While Box has benefited from this trend, it has strived to take full advantage of it, as some of its services and products are offered by competitors such as Microsoft Corp. either for free or at a lower cost.
Earlier this month, Box reported earnings in the fourth quarter that exceeded analysts’ expectations.
Reporting by Greg Roumeliotis in New York and Joshua Franklin in Boston; Montage by Nick Zieminski