By Svea Herbst-Bayliss
NEW YORK (Reuters) -Activist investor Jana Partners is lining up support for a possible boardroom battle at Lamb Weston after a survey showed roughly half of the french-fry maker’s top 50 shareholders want the entire board thrown out, according to a letter seen by Reuters.
Jana owns roughly 7% of Lamb Weston and has spent the last seven months pushing the company, which is worth nearly $8 billion, for operational and capital improvements and possibly even a sale.
Now the hedge fund has until the end of June to nominate directors to sit on Lamb Weston’s 11-member board. A spokesperson for Jana declined to comment on the firm’s plans.
Lamb Weston did not immediately respond to a request for comment.
Last month, Jana commissioned a research group to poll Lamb Weston’s top shareholders, excluding itself, to gauge investor sentiment after the company’s stock price tumbled 37% in 12 months and it replaced its chief executive in January.
Jana detailed the results to fellow shareholders in the letter, noting that a majority supported a complete overhaul of the board, while more than 80% of the polled investors supported a significant overhaul of the board.
“Shareholder confidence in the Board was non-existent with an average score of 1.3 on a scale of 1 (no confidence) to 10 (significant confidence),” the letter said.
“Lamb Weston’s board cannot magically erase years of systematic failures and the destruction of billions of dollars of shareholder value through a perfunctory CEO change,” the letter, signed by Jana’s managing partner and portfolio manager, Scott Ostfeld, said.
He encouraged investors to contact the company directly.
Jana has long been laying the groundwork for a board fight by identifying industry executives, including former Lamb Weston executive chairman Timothy McLevish, as potential directors.
The last time Jana took a matter to shareholders for a vote was in 2022 when it publicly opposed software company Zendesk’s planned acquisition of Survey Monkey parent company Momentive. Zendesk investors rejected the deal by a wide margin, prompting its termination.
(Reporting by Svea Herbst-Bayliss; Editing by Nia Williams)
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