Activist investor Engaged Capital was successful in winning two board seats at video software and interactive guide specialist Rovi, ousting Jim O’Shaughnessy and board chairman Andrew Ludwick, according to preliminary voting info provided by Rovi’s proxy solicitor.

In their place, Rovi stockholders elected Raghavendra Rau, most recently the CEO of SeaChange International, and Glenn Welling, the founder and chief investment officer of Engaged Capital.

Engaged Capital, which has been unhappy with Rovi’s financial performance and strategy, had also originally put forth two other candidates for board seats at Rovi: David Lockwood, now CEO and president of EnergySolutions and a previous director of BigBand Networks (now part of Arris), and Philip A. Vachon, founder and a principal owner of IPMG AG. 

Rovi said Wednesday (May 13) that, per the company’s bylaws, Tom Carson,  Rovi’s president and CEO, will assume the role of interim chairman of the board.

In addition to Carson, Rovi stockholders also re-elected Alan L. Earhart; N. Steven Lucas; James E. Meyer; and Ruthann Quindlen. 

“We thank our stockholders for their efforts and consideration in re-electing five of our directors, and the continued confidence they have expressed in Rovi’s Board and strategy,” Carson said, in a statement. “We also value insights and feedback we have received from our stockholders over the past several weeks.  We look forward to welcoming Glenn and Raghu to the Board, once the vote has been certified, and to working with them constructively to build value for Rovi stockholders over the long term.”

In addition to thanking Ludwick and O’Shaughnessy for their service to Rovi, Carson said “Rovi has extremely exciting opportunities ahead, and we look forward to building on our leading IP portfolio and next-generation suite of products to deliver significant growth for years to come.”

Engaged Capital owns 550,000 shares of Rovi common stock.

“Our nominees will contribute fresh, independent, shareholder perspective to the boardroom, and bring extensive experience in developing and implementing strategies that increase shareholder value,” Welling said, in a statement. “Engaged Capital believes that Rovi has the potential to deliver significant value to shareholders. While we would have preferred to avoid a protracted proxy contest, we believe that this process provided shareholders with a forum to express an unequivocal preference for change.”

Before the vote, Rovi had hired Credit Suisse to help it defend against actions being led by Engaged, Reuters reported. Reuters reported in February that Rovi has received interested from private equity firms that have focused on a possible sale of all of Rovi or portions of the company, but said it was not yet clear whether Rovi was open to a sale.  

Rovi Corp. has found itself on the defensive amid a proxy fight launched by an activist investor that centers on four board director slots at Rovi, the Santa Clara-based company that specializes in multiscreen video navigation systems and metadata services. 

Engaged Capital, a firm that owns 549,900 shares of Rovi stock that is unhappy with Rovi's performance and strategy, issued a letter to the Rovi board on March 12 arguing that shareholders have gotten a negative return in the seven years since Mavrovision and Gemstar merged in May 2008, stressing that “change is clearly needed.”

According to the letter, Engaged Capital said it initiated conversations nearly six months ago with Rovi chairman Andrew Ludwick “regarding the need for fresh experience in the boardroom,” but believes the board has procrastinated and left it no choice but to formally nominate four candidates at Rovi’s annual meeting on Dec. 29, 2014.

The public letter revealed Engaged Capital's four board candidates: 

-David Lockwood, 55, who has been CEO and president of EnergySolutions Inc. since 2012. He is also a former director of BigBand Networks (now part of Arris), and was once chairman and CEO of Liberate Technologies (an ITV specialist that sold its domestic assets to Comcast and its international components to SeaChange International in 2005), and was CEO and president of Intertrust Technologies.

-Raghavendra Rau, 65, who most recently was CEO of SeaChange (Jay Samit was named his successor in October 2014), and now serves as director of iProf Learning Solutions. Rau has previously served as a director of Aviat Networks and at Microtune. Rau is also late of Motorola.

-Philip A. Vachon, 56, is a founder and a principal owner of IPMG AG, a privately held global intellectual property licensing firm, formed in 2008. He has also served as a director of Unwired Planet, an intellectual property and technology licensing company, since June 2013. He is also the former president of Liberate International, Oracle and was on the board of Hostess Brands from 2007 to 2009.

-Glenn W. Welling, 44, is the founder and chief investment officer of Engaged Capital, which was founded in February 1012. Welling was also principal and managing director at Relational Investors, billed as a $6 billion activist equity fund. Welling is also late of Credit Suisse Group AG, S

“Despite our patience,” Engage Capital wrote, “the Board has never made a single proposal to Engaged regarding Board change or our highly-qualified nominees. Rather, the Board recently indicated that it does not plan to work with Engaged but instead intends to unilaterally select its own candidates for addition to the Board so as to avoid ‘disruption’ in the boardroom.”

Rovi responded with a statement of its own on March 12, noting that it is open to constructive input from all shareholders and that it has been in the process of evaluating “a number of qualified new board candidates” via the help of an independent executive recruiting firm. “We are currently in the final stages of that process.”

Rovi claimed it has kept Engaged Capital apprised of its progress, but said Engaged Capital “refused to cooperate and denied our requests to interview their recommended nominees that fit our search criteria,” and that the firm has tried to undermine the process.

“Based upon their action today, Engaged Capital, which is reported to own only 0.6% of the Company’s shares, is attempting to seize control of the Company without paying stockholders a control premium,” Rovi claimed. 

Rovi has hired Credit Suisse to help it defend against actions being led by Engaged, Reuters reported last week. Reuters also reported in February that Rovi has received interested from private equity firms that have focused on a possible sale of all of Rovi or portions of the company, but said it’s not yet clear if Rovi is currently open to a sale.  

Last month, Rovi posted a fourth quarter loss of $5.9 million (6 cents per share), on revenues of $134.2 million, down 12% from the year-ago period.