By Svea Herbst-Bayliss
BOSTON (Reuters) - Activist investment firm Legion Partners Asset Management on Thursday nominated four directors to OneSpan (NASDAQ:OSPN)'s board after having publicly pushed the cybersecurity firm to improve its stock performance and sell assets.
Legion, which owns roughly 6.8% of the stock and has been an investor since 2018, said in a letter that the board has failed to adequately correct the company's low share price and has made only incremental changes to the board.
"We believe more substantive change is necessary," Legion wrote to other shareholders on Thursday. Shareholders now need to elect "strong technology leaders to the Board who will seek to begin a comprehensive strategic review of the Company to determine the best path forward for the Company and all its stakeholders", the letter continued.
The company did not immediately respond to a request for comment.
Legion criticized the 10-member board's long-serving directors saying they lacked relevant experience. "It should not be too much to ask that a modern software company’s board should be led and overseen by individuals with modern software experience."
The activist investor nominated Rinki Sethi, chief information security officer at Twitter, Michael McConnell, a private investor with board experience, Sagar Gupta, an analyst at Legion who leads TMT investing, and Sarika Garg, a former SAP executive, as directors.
The stock price jumped nearly 4% to trade at $24.96.
Legion first went public with its demands six months ago after holding private conversations. At that time, it also pushed for the board to replace T. Kendall Hunt, who founded the company and had served on the board for more than two decades, as a director. Hunt retired from the board in September.
Legion has pushed the company to sell its hardware business and said on Thursday "the segment has become difficult for management to predict, contributing to multiple debacles on earnings calls".