(Reuters) -Activist investment firm Engine Capital pushed ride-sharing platform Lyft on Tuesday to consider strategic alternatives, including a sale, amid a proxy battle.
The investor, which owns about 1% of Lyft, also called for governance and capital allocation reforms at the company and accused its board of lacking financial expertise.
Engine criticized the board for rejecting all four of its director suggestions without interviews and claimed that seven of Lyft’s 10 directors lack prior public company board experience.
Earlier this month, Engine nominated two directors to the board of Lyft and said its attempts to engage with the ride-hailing company’s leadership were rebuffed.
Engine said on Tuesday its director nominees would encourage Lyft’s board to explore strategic alternatives that could possibly lead to the sale of the company or parts of it.
It proposed Lyft execute a $750 million accelerated share repurchase to counterbalance stock underperformance and signal confidence to the market.
Lyft’s cash balance and short-term investments totaled about $2 billion at the end of last year.
The company’s shares have fallen about 83% since its initial public offering in 2019, compared to sharp gains by larger rival Uber Technologies and broader indices.
Lyft has a market value of about $5.2 billion, compared to Uber’s $164 billion.
Lyft did not immediately respond to a Reuters request for comment.
Engine also criticized Lyft’s dual-class share structure, which concentrates 30% of voting power in the hands of its co-founders, who now hold about 2.3% of the company’s equity.
The activist called for the board to eliminate staggered elections and address excessive equity dilution, which it said has averaged nearly 8% annually, undermining shareholder value.
(Reporting by Akash Sriram in Bengaluru; Editing by Shilpi Majumdar)
Comments