EXCLUSIVE-Anson Funds eyes proxy fight at Match, plans to nominate directors, sources say

By Svea Herbst-Bayliss

NEW YORK, March 11 (Reuters) - Hedge fund Anson Funds is gearing up for a boardroom fight at Match Group MTCH.O and plans to nominate several directors to the online dating company's 10-member board, two sources familiar with the matter told Reuters.

Anson, which owned roughly 0.6% of Match at the end of December according to a regulatory filing, has been pressing the parent of Tinder, Hinge and OkCupid for over a year to rethink capital allocation, cut costs, and consider a strategic review of its MG Asia business, the sources said.

Additionally the investor has raised concerns about Match's governance and pushed for management to refine its corporate strategy, said the sources who requested anonymity to speak about the private discussions.

Only three of Match's 10 directors will stand for election this year, creating a flash point for many investors who generally want all board members to be up for election annually.

Anson also highlighted tight business connections among a handful of Match directors and ties to former owner IAC/Interactive as worrisome and found the quick paced turnover in the executive suite where the company has had four chief executives in five years to be problematic, the sources said.

Over the last year, Anson and Match have held a dozen meetings and the company has made some changes, including holding an investor day and agreeing to return capital more aggressively, suggested by activist investors including Anson.

A representative for Match was not immediately available for comment and a representative for Anson declined to comment.

For Sagar Gupta, who is leading the campaign after he joined Anson as a portfolio manager in 2023 to build the firm's activism practice, the pace of change remains too slow, the sources said.

Gupta, who joined the board of U.S. call center software company Five9 in December, has a track record of investing in technology, media and telecommunications. He spearheaded many of those types of investments at activist Legion Partners, where he worked before joining Anson.

Match is valued at roughly $8 billion but has shrunk dramatically since the COVID pandemic when it was worth around $40 billion. Its stock price, which closed at $32.03 on Monday, has slipped nearly 2% this year but it has lost 67% in the last three years when the broader S&P 500 stock market index gained 41%.

Match's shrinking stock price has made the company vulnerable, prompting at least three activist investors to push for changes within the last year.

In early 2024, Elliott Investment Management, one of the world's biggest and most prominent activist investors, unveiled a $1 billion investment. The company named two new directors to the board several weeks later.

In July Starboard Value, another activist investor, was urging Match to consider a sale if it could not revitalize the business.

Regulatory filings detailing the two activists' holdings at the end of 2024 show Elliott owned a 4.8% stake while Starboard held 5.8% of the company.

While Anson's holding is considerably smaller, lawyers and bankers say the size of an activist's position is less important now as a growing number of investors push for changes at all types of companies and corporations are bracing for more expensive and noisy fights with corporate agitators.