ConAgra Foods is being targeted by activist investor Jana Partners, which is threatening to nominate three directors in the wake of the food company’s disappointing acquisition of Ralcorp Holdings Inc.
Jana, a hedge fund founded by Barry Rosenstein that disclosed a new active stake of about 7.2 per cent in ConAgra, said in a regulatory filing Thursday that it asked the company to push back its 21 June deadline to submit nominations for its annual meeting to provide “more time to have collaborative discussions.” In a statement in response to Jana’s filing, ConAgra said it has extended that deadline to 8 July.
ConAgra’s $6.7 billion purchase of Ralcorp in 2013 “has been followed by disappointing performance for stockholders, repeated guidance misses, negative revisions to long-term earnings targets, no dividend per share growth, and operating performance challenges,” Jana said in the filing. The hedge fund said it began amassing its stake after ConAgra wrote down the deal by $1.3 billion in March.
“We welcome shareholder engagement,” ConAgra said in the statement. “We look forward to opening discussions with Jana Partners” after ConAgra’s fourth-quarter earnings release on 30 June.
ConAgra named the former head of Hillshire Brands Co. as a replacement for Rodkin. Sean Connolly, who led Hillshire Brands until its acquisition by Tyson Foods last year, officially took the reins in April. He had earlier abandoned an unpopular deal for Hillshire to buy Pinnacle Foods.
ConAgra’s “board has failed to adequately address the shareholder value destruction and persistent underperformance that followed the Ralcorp acquisition,” Jana said.
Founded in 2001, Jana has grown to oversee about $11 billion. While most of the hedge fund’s investments aren’t active -- where it amasses an equity stake to try and cajole executives and directors to make changes to boost shareholder returns -- it’s those campaigns that often attract the most attention.
Bloomberg News, edited by ESM
