Vivus Inc. said today that it offered its largest shareholder equal representation on its board if it would drop its fight for more control of the company, but said that the offer was immediately rejected.
First Manhattan Co., which owns a 9.9 percent stake in the obesity drug maker, has been vying to replace Vivus’ board and CEO. Vivus and the investment firm have been in talks about a possible settlement ahead of a shareholder vote set for Thursday, but have so far been unable to reach a deal.
Under Vivus’ latest proposal, both the company and First Manhattan would get four representatives on the board. The four Vivus nominees would include the four most recently appointed directors, while the four First Manhattan nominees would include the three recently recommended by a major proxy advisory firm and a new CEO.
In addition, Vivus’ current CEO, Leland Wilson, would resign from the board and then retire as CEO when a new leader was appointed. Wilson also would serve as an adviser to help with the transition to new leadership.
Wilson said in a statement that the offer is “extremely fair and balanced” and that the company is disappointed with First Manhattan’s rejection of it. He urged shareholders to vote for the company’s nominees at its annual meeting.
A representative for First Manhattan didn’t immediately return emails seeking comment.
News of the offer came after First Manhattan said Tuesday that it’s suing Vivus for pushing back the shareholder vote, which was originally set for Monday, by three days. The investment firm claims it was in a position to win the vote before the delay.
The suit aims to stop Vivus and its representatives from soliciting proxies or votes for the company’s annual shareholder meeting. First Manhattan also wants Delaware’s Court of Chancery to certify disputed results of the election of Vivus’ directors and to stop the company’s current directors from taking any further action on behalf of Vivus.
The dispute between the company and the investment firm began in March. Stating that the launch of Vivus’ weight loss drug Qsymia was unsuccessful, First Manhattan initially moved to replace Vivus’ entire board of directors, claiming that the company needed new and independent leadership. It also sought expand the board to nine directors from six.
Last month, First Manhattan reached out to shareholders seeking support for its slate. And earlier this month, it said it would name Anthony Zook, the former president of MedImmune, as Vivus’ CEO if it gains control of the company.
Wilson has been CEO of Vivus since 1991.
Vivus shares closed Tuesday at $14.40, up 7.3 percent since the start of the year.
