Sources involved in the matter said on Friday that the Microsoft Corporation’s board members had discussions with ValueAct Capital Management LP these past few days over the activist shareholder's demands to secure a seat on the company's board, Reuters reported.
The sources also added that ValueAct is in quest of appointing a person from its own organization to have a say in the way the world's largest software company adapting to the new world of mobile computing.
Microsoft, with a weak demand for its latest Windows System and poor sales of its surface tablet according to its quarterly report, wiped $34 billion off its market value marking it as its major sell-off in four years.
ValueAct based in San Francisco, manages more than $10 billion for clients and owns 0.4 percent of the total shares outstanding of Microsoft as of March, is believed to be buying more.
The fund, co-founded by finance industry veteran Jeff Ubben in 2000, has made repute for venturing in companies and functioning with management in private to modify fundamental strategies. ValueAct's other major holdings include Motorola Solutions, Inc., Adobe Systems, Inc., and Valeant Pharmaceuticals International, Inc.
These past few months, some of Microsoft’s top institutional investors opened lines with ValueAct expressing concern over management execution and strategy, sources said.
The noticeable lack of succession planning is one of the highlights of the talks. Steve Ballmer, the CEO since 2000, displays no motives of abandoning the position.
Microsoft CEO Steve Ballmer, who is now 57 years old, once mentioned that he foresees holding on the position until his youngest goes to college which is around four to five years from now. However, he has not openly addressed the matter publicly since then.
Microsoft and ValueAct kept their mouth shut about the matter. Though, the software company has previously stated there is a CEO succession plan in place, they haven’t given details of it yet.
