Activist plans to push pet food company to make changes to boost share price and explore sale
The activist investor owns nearly 10% of Freshpet Inc. and plans to push the pet food company to make changes to boost its share price and explore a sale, according to people familiar with the matter.
Jana Partners LLC believes that Freshpet could be an attractive target for larger competitors in the sector who have shown interest in deals in recent years. He also wants the company to consider other changes, such as operational improvements and capital allocation improvements.
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The activist hedge fund hired former Kraft Foods CFO Timothy McLewish, as well as Diane Dietz, who was the chief executive of skincare maker Rodan & Fields, and the former CEO of Jarden Corp. James Lilly for campaign assistance. people said.
Two former professional athletes — basketball star Dwyane Wade and baseball star CC Sabatia — are serving as special advisers, they said.
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Freshpet specializes in refrigerated high quality pet foods made from blends of meats, vegetables and fruits. Freshpet of Secaucus, New Jersey, has been struggling lately; Announcing its second-quarter earnings in August, the company revised its outlook as a result of inflationary pressures and quality control issues. Its shares are down about 80% from their April 2021 high and about 60% from the start of the year to Wednesday.
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At its peak, Freshpet’s market value was around $8 billion; now it is just under $2 billion. Freshpet’s stock rose 16% after The Wall Street Journal reported Yana’s plans.
Earlier this month, the company shuffled several senior positions in an attempt to improve its operations and said its chief financial officer had stepped down. CEO Billy Cyr said at the time that the company’s rapid growth over the past few years has created a “unique set of opportunities and challenges.”
In recent years, food manufacturers including Nestlé SA and General Mills Inc. have pointed to pet food sales as a bright spot as consumers spend more money on more sophisticated offerings. Nestlé owns the Purina brand, among other things, while General Mills’ portfolio includes Blue Buffalo, a premium brand it bought for about $8 billion in 2018.
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Recently, a number of investments have been made in this sector, including the acquisition of Mars Inc. small manufacturer of fresh pet food earlier this year. In August, Colgate-Palmolive Co. said it was buying three dry pet food plants for $700 million to support the growth of its Hill’s Pet Nutrition business..
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New York-based Jana was founded in 2001 by Barry Rosenstein. He opposed other consumer companies including Whole Foods Market Inc., sold to Amazon.com Inc. in 2017, and Pinnacle Foods, sold to Conagra Brands Inc. in 2018. In 2014, he pushed for the sale of PetSmart. The following year, the pet supply store was sold to a consortium of private equity firms.
Credit: www.foxbusiness.com /