(New throughout, updates share price, adds analyst comment,details on board nominees)By Munsif Vengattil and Liana B. BakerApril 2 (Reuters) - Hedge fund Elliott Management Corp onMonday disclosed a 10.3 percent stake in Commvault Systems Inc and nominated four directors to the data softwaredeveloper's board, sending the company's shares up almost 12percent.Elliott, whose new stake makes it one of the largestshareholders in Commvault, urged the company to start anoperational review and return capital to investors.Elliott said Commvault's troubles include severe marginunderperformance, weak financial targets, recurring executionissues and lagging corporate governance, all issues it said canfixed. Elliott also called for a "review of management" in theletter. Commvault Chief Executive Officer Robert Hammer, 75, isone of the four directors up for nomination at this year'sannual meeting. Elliott is calling for the four directors it isnominating to replace Hammer, along with three othermanagement-backed board nominees.Commvault said in a statement that it has held initial talkswith Elliott."We go into these discussions with an open mind, a goal ofenhancing stockholder value, and optimistic for Commvault'sfuture," Commvault said.The New York-based hedge fund, which has more than $33billion in assets, is known for shaking up management andpressuring companies for change. It comes a week after Elliottdisclosed large stake in travel software firm TravelportWorldwide and said it might try to purchase the travelsoftware company outright. Elliott, known for pushing technology companies to exploresales processes, did not explicitly call for a sale of thecompany in its letter Monday.
Two of the board nominees it is backing, however, have tiesto private equity firms. Private equity firms have turned out tobe popular buyers of many of the tech companies that Elliott hastargeted over the years.
Eric Martinuzzi, analyst at Lake Street Capital Markets,called Elliott's letter a "positive near-term development forthe shares although it tends to put pressure and create a newdistraction for management."Commvault, based in Tinton Falls, New Jersey, went public inSeptember 2006 and has a market valuation of about $2.6 billion.Commvault shares rose $6.80, or 11.9 percent, to $64 a shareon Monday. (Reporting by Munsif Vengattil in Bengaluru and Liana B. Bakerin New York; Additional reporting by Sonam Rai and SupanthaMukherjeein Bengaluru; Editing by Arun Koyyur and DavidGregorio)
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