Activist investor ValueAct Capital has taken a $US2 billion stake in Microsoft, CNBC reported on Monday, helping Microsoft shares climb to a seven-month high.
CNBC's David Faber reported the stake. A representative of ValueAct was not immediately available to comment.
Microsoft shares rose as much as 4.75 per cent to $US31.18, touching their highest levels since last September, before paring gains. With Monday's jump, the stock is up 16 per cent this year, putting it on track for its best annual performance since 2009.
One of the chief complaints of Microsoft's investors is that the stock is little changed today from where it was 11 years ago.
At Friday's closing price, a $US2 billion stake would represent about 67.2 million Microsoft shares. That represents less than 1 per cent of Microsoft but would be enough to make ValueAct a top-15 investor in the company, based on Thomson Reuters data.
ValueAct describes its management as being experts in "sourcing investments in companies they believe to be fundamentally undervalued, and then working with management and the company's board to implement strategies that generate superior returns on invested capital."
Most recently, ValueAct was involved in pushing industrial machinery maker Gardner Denver to sell itself, an effort that culminated in a $US3.74 billion deal with private equity firm KKR.
Microsoft and Steve Ballmer, its CEO for the last 13 years, have been the targets of much criticism over the past decade, chiefly for falling behind Apple and Google in the shift toward mobile computing.
But the company has not been subject to much overt shareholder protest. The most public challenge came two years ago, when Greenlight Capital's David Einhorn - who made his name warning about Lehman Brothers' financial health before the investment bank's collapse - called for Ballmer to step down.
"His (Ballmer's) continued presence is the biggest overhang on Microsoft's stock," Einhorn told fellow fund managers at the annual Ira Sohn Investment Research Conference in 2011.
Microsoft never responded publicly to Einhorn, but Ballmer has indicated he has no plans to step down and intends to stay on for another four or five years at least. Greenlight Capital has since cut its stake. At the end of last year it held a negligible 0.13 per cent of Microsoft's outstanding shares.
Any attempt to force change within the company from outside would likely face opposition from its largest shareholder, chairman and co-founder Bill Gates, who still owns 5 per cent of the company. Ballmer is the third-largest holder with about 4 per cent.
Microsoft shares were up nearly 4 per cent at $US30.94 in midday trading.
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