Cognizant has introductory discussion with activist investor Elliott; to review letter

BENGALURU: Cognizant said it had an introductory discussion with Elliott Management after receiving the activist hedge fund's letter asking for a board shakeup, a buyback, a dividend and changes to its sales and delivery.

"Cognizant welcomes open communications with all of its shareholders and values their input….. The Company intends to review the letter carefully and will respond in due course," Cognizant said in the statement.

In a 16-page letter posted on its website, the hedge fund outlined a 'Cognizant Value-Enhancement Plan' aimed at boosting the company's stock price. Cognizant's shares have been under pressure this year after the company cut its guidance for the year three times and disclosed that it had made payments in India that fell foul of the US Foreign Corrupt Practices Act.


This is the first time an Indian IT firm is facing an onslaught from an activist hedge fund and Elliott has a number of wins under its belt. In 2015, Elliott successfully pushed software firm Informatica to sell itself to PE buyers and got Citrix's CEO to resign and was given a board seat in that company.

"The Cognizant Board of Directors and management team regularly review the Company's strategic priorities and opportunities towards the goal of enhancing value for all shareholders," Cognizant said.