Gateway Investors Seek Board Representation

The saga for control of struggling computer manufacturer Gateway intensified on Wednesday, as a renegade group of investors that hold 10.7 percent of the company asked for representation on the company's board and asked the company to open up to the possibility of a sale.

Made of Firebrand Partners and Harbinger Capital Partners, the investor group first met with Gateway representatives in August of this year. However, they were apparently not satisfied with the results of those discussions.

Additionally, it appears the investment group is not happy with the board's responsiveness, saying that it lacked "the sense of urgency to address the company's challenges and capitalize on its opportunities" in a letter to Gateway executives.

Although not mentioned specifically, the group also seems to be disappointed in the company's financial performance, noting that Gateway should be posting better numbers. Scott Galloway of Firebrand Partners noted in a letter that the company has great brand and channel strength, but meager gross margins.

"If, working together, we cannot leverage these assets, then they should be put in the hands of an organization that can (i.e., the Company should be sold)," he wrote. He asked that the company respond by the end of the month, or the group would be forced to take action.

In a statement issued Thursday, Gateway said it would review Firebrand's proposal. "Following its review, the Committee, which consists solely of independent directors, will make a recommendation to the full Board of Directors," it said.