NEW YORK, Dec 28 (Reuters) - Activist investor Ancora Holdings is preparing to challenge the board of directors of Harmonic, in a push to get the streaming equipment company to divest its video business faster, according to people familiar with the matter.

Ancora, which first invested in Harmonic in 2019 and is a top 10 shareholder, has identified candidates for a slate it plans to nominate to the San Jose, California-based company's board, the sources said.

Ancora is pushing Harmonic, which has a market capitalization of about $1.4 billion, to use the proceeds from the sale of the video business for share buybacks, the sources said.

Harmonic's board director nomination window opens on Feb. 24. It is possible that Ancora will not proceed with the challenge if Harmonic cuts a deal that addresses the hedge fund's concerns about the board's composition, the sources said.

Harmonic did not immediately respond to a request for comment. Ancora declined to comment.

Ancora has been pushing Harmonic privately for board representation and for a divestment of the video unit, which makes software used by media companies to process and encode video content, since late summer, the sources said.

In October, Harmonic said it would explore strategic options, including a potential sale, for its video business, after receiving interest for the unit over recent months from potential buyers it did not name. It did not give a timetable for completing that process.

Harmonic's shares have shed more than 20% of their value since the company said during its second-quarter earnings on July 31 that hardware sales delays would lead to revenue coming in below its expectations.

Industry analysts have said large streaming players, video operators and private equity firms could be interested in the video unit.

"We valued the unit worth about $400 million, yet feedback suggests the Street envisions a sale for $100-200 million," Raymond James analysts wrote in a Dec. 12 note. (Reporting by Anirban Sen in New York; editing by Grant McCool)