By Svea Herbst-Bayliss
BOSTON (Reuters) - Legion Partners Asset Management on Wednesday said it is pushing ahead with a proxy contest to seat four directors on OneSpan (NASDAQ:OSPN)'s board after the cybersecurity firm rejected a settlement proposal from the activist investment firm.
Legion, which has been an investor in OneSpan since 2018, also said it now owns 6.91% of the company's stock, up from the 6.8% stake it owned when it first said in February that it was nominating directors.
The activist firm wants OneSpan to engage in a strategic review and consider selling its hardware business, its eSignature business or even the entire company. It has also criticized the company for taking only incremental steps to reverse its underperformance.
The firm, founded by Christopher Kiper and Ted White, said in a regulatory filing that it had sent an email to the board with a high-level proposal to avoid a proxy fight. It proposed adding three Legion nominees immediately and to push ahead with the strategic review.
The board responded that its unanimous view was to "not proceed in discussing a settlement agreement based on the proposed terms."
A company spokeswoman did not immediately respond to a request for comment.
Legion originally wrote to shareholders that it is now time 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 investment firm originally criticized OneSpan for having failed to adequately correct the company's low share price and having made only incremental changes to the board.
The company earlier this month appointed Garry Capers, a cloud solutions executive at Deluxe (NYSE:DLX) Corporation, to its board.
OneSpan is currently valued at roughly $1 billion and has seen its share price climb 30% since January. It was trading at $26.86 on Wednesday.