Activist investor calls on TreeHouse Foods to consider its options
On February 10, TreeHouse Foods’ stock increased by almost 23% following a filing with the US Securities and Exchange Commission by activist investor Jana Partners, who pushed the firm to consider a strategic review, which may include a sale.
With TreeHouse Foods now three years into a thorough turnaround, New York-based Jana, which owns a 7.5% position in the company, said it has expanded its holdings in TreeHouse because “they believe the shares are undervalued and represent an attractive investment opportunity.”
In the SEC filing dated February 10, Jana stated, “Jana has had, and intends to continue to have, constructive discussions regarding avenues to resolve (TreeHouse’s) undervaluation and total stockholder return, including evaluating a sale of (TreeHouse), operations, capital allocation, corporate governance, and compensation practices.”
According to TreeHouse Foods, it has had numerous conversations with Jana in an effort to keep a positive relationship going.
“Jana strongly supported the steps TreeHouse has taken to drive growth and profitability and enhance stockholder value,” the company said in a statement. Specifically, Jana has emphasized our dominant market share in the private label industry, our advancements in enhancing operational efficiency and cash flow, and the potential for wealth creation presented by our acquisition of Riviana represents.”
Jana has also proposed Charles Myers, John Paul Gainor Jr., and Meredith Adler as possible candidates for the TreeHouse board of directors.
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According to TreeHouse Foods, Jana’s nominations will be examined by the Board Nomination and Corporate Governance Committee in compliance with standard operating procedures.
Jana has advocated for consolidation in the food and beverage industry on previous occasions. Jana demanded the sale of Pinnacle Foods, Inc. in 2018. Later in 2018, Conagra Brands, Inc. finally purchased Pinnacle. Additionally, Jana pressured Whole Foods Market to think about strategic options in 2017. A few months later, Amazon bought Whole Foods.