By Svea Herbst-Bayliss
NEW YORK(Reuters) – Jana Companions is working with a sixth government to push for modifications at Lamb Weston, signaling the activist investor could search to switch the vast majority of the french fry maker’s board, based on a regulatory submitting made on Friday.
Potato business veteran Jeff Delapp, who beforehand served as president of Lamb Weston after which as president of Lamb Weston competitor McCain Meals, North America, joined the fund’s lineup of executives who might grow to be board candidates.
Jana Companions owns greater than 5% of Lamb Weston and has been pushing the corporate to enhance operations and capital allocation or put itself up on the market.
Final week, disappointing Lamb Weston earnings despatched the inventory value tumbling as a lot as 20%. Since January Lamb Weston shares have dropped 39%. The corporate additionally made an surprising CEO change when it stated it was changing Chief Government Officer Tom Werner with Chief Working Officer Michael Smith. It stated the “appointment represents the culmination of a thoughtful, year-long succession planning process.”
Lamb Weston stated it swung to a $36 million loss in its fiscal second quarter after a drop in gross sales and blamed softer demand and better manufacturing prices. It lower its earnings outlook for the total 12 months.
Jana is now ratcheting up strain on the board after calling final week’s earnings a “disaster” and saying Smith, as a part of the manager workforce, is “complicit in (Lamb Weston’s) widespread operational and strategic debacle.”
Wall Avenue analysts interpreted final week’s information to recommend the possibilities for a Lamb Weston transaction are rising. Jefferies analyst Rob Dickerson wrote the CEO change “feels like a panicked move” and Barclays (LON:) analyst Andrew Lazar wrote that final week’s steerage and inventory transfer “could make future strategic changes even more likely.” Reuters reported earlier this month that Publish Holdings (NYSE:) is working with bankers on a doable Lamb Weston deal.
Jana, which frequently companions with strategic and working companions, stated in an earlier submitting that it’s working with Continental Grain and that a number of executives, together with former Lamb Weston Government Chairman Timothy McLevish, could possibly be nominees.
Lamb Weston’s final annual assembly was held in September.
