Gaming gear provider Turtle Beach nears board deal with Donerail -sources

Turtle Beach

15/05/2022 20:59

By Svea Herbst-Bayliss
    May 15 (Reuters) - Donerail Group is close to reaching a
settlement with Turtle Beach Corp  HEAR.O  that will give the
activist investment firm representatives on the U.S. gaming gear
company's board of directors, people familiar with the matter
said on Sunday.
    Donerail, which has beneficial ownership of 7.4% of Turtle
Beach's outstanding shares, has criticized the maker of gaming
headsets and controllers for operational missteps and has been
pushing the company to sell itself. Turtle Beach maintains it
has been doing its best to find a buyer at an attractive price.
 urn:newsml:reuters.com:*:nL3N2WN30M
    Turtle Beach has agreed to add three Donerail nominees to
its board, expanding it from six to nine directors, the sources
said. One director is expected to retire at the annual meeting
next month.
    This comes after major Turtle Beach shareholders informed
the company they planned to back Donerail's board director
nominees at June's meeting, the sources added. Donerail in March
said it planned to replace the entire board, including CEO
Juergen Stark, with its own candidates. The settlement will
spare Turtle Beach this board challenge.  urn:newsml:reuters.com:*:nL2N2VO2Q7
    Turtle Beach's board has formed a strategic review committee
handling the process to sell the company and it will have four
members, including two Donerail directors, according to the
sources. Donerail's managing partner Will Wyatt will be an
adviser to that committee, the sources said.  urn:newsml:reuters.com:*:nL2N2WX26F
    If Turtle Beach is not sold within 120 days, a Donerail
principal and another director that Donerail would be allowed to
help select would join the board, essentially handing control to
the hedge fund.
    The sources said the settlement between the two sides could
be announced as early as Monday and asked not to be identified
because the matter is confidential.
    Turtle Beach, which has a market value of $275 million,
declined to comment.
    Its stock price has fallen 42% over the last 52 weeks
compared with a 3.4% decline in the S&P 500 index. 
    Turtle Beach said earlier this month it has engaged with
potential buyers on three separate occasions in the last five
years. The company recently received new acquisition interest,
according to the sources and has been in discussions with at
least two strategic buyers. The company expects to have reached
out to more than 50 parties as part of the sales process, one of
the sources said.

    <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Donerail launches proxy fight at Turtle Beach, seeks to oust
entire board     urn:newsml:reuters.com:*:nL2N2VO2Q7
Turtle Beach told shareholders it is exploring a sales process  
   urn:newsml:reuters.com:*:nL2N2WX26F
Turtle Beach explores strategic options as it defends itself
against hedge fund     urn:newsml:reuters.com:*:nL3N2WN30M
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 (Reporting by Svea Herbst-Bayliss in Boston; Editing by Lisa
Shumaker)
 ((svea.herbst@thomsonreuters.com; +617 856 4331; Reuters
Messaging: svea.herbst.thomsonreuters.com@reuters.net))