The appointment of a new CEO at Siebel Systems on Wednesday has done little to appease a group of shareholders demanding better management of the ailing company.
A group of shareholders that collectively owns about a third of Siebel's shares agrees that the company should buy back at least $1bn of its shares and seek a merger partner, according to shareholder activist and Providence Capital President Herb Denton. The consensus was reached at a meeting in New York on Wednesday afternoon organized by Denton's firm.
Denton, whose firm owns less that 1 percent of Siebel, said the meeting drew about 70 people. He declined to name any of them. His firm plans to share the group's recommendations with Siebel chairman Tom Siebel on Thursday, Denton said.
Providence sent the Siebel board a letter last month outlining its complaints and suggestions. The firm and other disgruntled shareholders are irritated by the company's poor financial performance compared with rivals. They're also upset that Siebel isn't putting its $2.2bn in cash to much use.
Since Denton sent the letter, Siebel warned investors that it would miss first-quarter earnings targets by a significant margin. Then the company fired CEO Mike Lawrie, appointed less than a year ago, and replaced him with board member George Shaheen.
Neither development inspired confidence among investors, Denton said.
"There was a feeling that this was a vote for the status quo from an entrenched management," Denton said. "If Lawrie, given his credentials, couldn't cut the ice, there are questions over whether Mr. Shaheen could."
A Siebel representative declined to comment for this story.
