June 12 (Reuters) - A shareholder is calling on flavoring company Senomyx Inc that works with PepsiCo Inc to drop its current chairman, to sell itself and add a new board seat, according to a letter reviewed by Reuters.
One of the company's large shareholders, Matthew Turk, who said he owns 4 percent of shares, or more than 1.9 million shares of common stock, is skeptical of the San Diego company's announced plans to explore a strategic review, and hopes to turn around its fortunes after its stock has lost 78 percent of its value since it went public in 2004, the investor said in the letter on Tuesday.
The flavors and ingredients space has been undergoing consolidation and growth as food multinationals, facing slowing growth for legacy food and drinks brands, adjust their offerings to appeal to new and healthier tastes. Last month, International Flavors & Fragrances Inc agreed to buy Israeli flavors and ingredients maker Frutarom Industries Ltd for $7.1 billion in cash and stock.
"There must not be a slow liquidation of Senomyx, but rather a complete sale either in whole or in parts as quickly as possible to preserve remaining shareholder value," Turk said.
Senomyx, which had a market capitalization of $62.8 million at the close of trading on Monday, could not immediately be reached for comment.
The company has seen its stock decline since Pepsi stopped a trial partnership involving using Senomyx ingredients in drinks such as Mug Root Beer ahead of what was widely expected to be a U.S. nationwide rollout in late 2016.
The company still has a non-exclusive agreement with Pepsi that runs until 2019, where Pepsi has access to natural flavor ingredients and sweeteners that were developed during their partnership, according to a news release. Pepsi could not be reached for comment.
Since changing the terms of its deal with Pepsi, the management team has not set up any new commercial partnerships despite claiming to have interest from at least 25 companies, Turk said.
Reporting by Harry Brumpton in New York; Additional reporting by Liana B. Baker in New York; Editing by Lisa Shumaker