WILSONVILLE, OR -- A minority shareholder and hedge fund is threatening a proxy fight at Mentor Graphics, saying it will run propose its own slate for the EDA company's board.

As reported by the New York Times today, Casablanca Capital submitted a letter to Mentor’s board indicating it will push for a bigger say in the company. In the letter, the firm said that it intends to run an alternate slate of directors, in part because the company pushed up its shareholder meeting date for this year.

On Feb. 4, Mentor announced its annual shareholder meeting would be May 12, six weeks earlier than last year. Per company bylaws, the deadline by which shareholders may file their own board slates is 13 weeks -- one business quarter -- prior to the meeting, or in this case, Feb. 14.The move is seen by some as a tactic to prevent shareholders from nominating a dissident slate.

“Your highly questionable actions, however, have virtually eliminated time for any such discussions and have left us with no choice but to nominate an alternative slate of directors for the annual meeting who we know would willingly engage in open and constructive dialogue with shareholders,” Casablanca chief executive Douglas Taylor says in the letter.

Over the past year, Mentor has been a target for several high profile investor groups that saw the company's lagging stock as an opportunity to cash in. One of those firms is Casablanca, which owns roughly six million shares, or 5.5% of the software company.

Mentor is already being pressured, if subtly, by takeover specialist Carl Icahn, who directly or indirectly owns 14.7% of Mentor's stock. Icahn's accumulation of shares led Mentor to employ a poison pill measure to help head off a hostile takeover. Icahn, too, complained about the date change.

"We asked the company to rescind the announcement, which it refused to do," Icahn said in an SEC filing.

Also lurking in the shadows is billionaire George Soros, who bought up 76 million convertible notes in the company during the past quarter. A convertible note is a type of secured debt that contains an option where the note will be converted into a predefined amount of the issuer's (Mentor's) shares.

In response to a PCD&F request for comment, Mentor spokesperson Ry Schwark said, “Mentor Graphics’ Board and management team are focused on delivering shareholder value and we have a proven track record of growing our earnings and share price.  Our share price has grown over 70% in the last year, and it grew about 50% in the previous year, for a two year growth of over 150%, significantly outperforming our peer group and the market.

"We doubled our annual earnings last year and our earnings guidance for this year, given in our November 19th earnings release, increases those earnings by another 40%.  We are reporting our fourth quarter and full year 2011 earnings on March 3, 2011.

"With regard to nominees, our nominating and corporate governance committee, comprised of independent directors, will evaluate and consider qualified nominees.”

Starting with the fiscal year ended January 2008, Mentor has lost $65.4 million.

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