Jana Partners signs up sixth executive as it pushes for changes at Lamb Weston, filing shows

Post Holdings

27/12/2024 13:36

By Svea Herbst-Bayliss
       NEW YORK, Dec 27(Reuters) - Jana Partners is working
with a sixth executive to push for changes at Lamb Weston,
signaling the activist investor may seek to replace the majority
of the french fry maker's board, according to a regulatory
filing made on Friday.
    Potato industry veteran Jeff Delapp, who previously served
as president of Lamb Weston  LW.N  and then as president of Lamb
Weston competitor McCain Foods, North America, joined the fund's
lineup of executives who could become board candidates.
        Jana Partners owns more than 5% of Lamb Weston and has
been pushing the company to improve operations and capital
allocation or put itself up for sale.
    Last week, disappointing Lamb Weston earnings sent the stock
price tumbling as much as 20%. Since January Lamb Weston shares
have dropped 39%. The company also made an unexpected CEO change
when it said it was replacing Chief Executive Officer Tom Werner
with Chief Operating Officer Michael Smith. It said the
"appointment represents the culmination of a thoughtful,
year-long succession planning process."
    Lamb Weston said it swung to a $36 million loss in its
fiscal second quarter after a drop in sales and blamed softer
demand and higher manufacturing costs. It cut its earnings
outlook for the full year. 
    Jana is now ratcheting up pressure on the board after
calling last week's earnings a "disaster" and saying Smith, as
part of the executive team, is "complicit in (Lamb Weston's)
widespread operational and strategic debacle."
    Wall Street analysts interpreted last week's news to suggest
the chances for a Lamb Weston transaction are growing. Jefferies
analyst Rob Dickerson wrote the CEO change "feels like a
panicked move" and Barclays analyst Andrew Lazar wrote that last
week's guidance and stock move "could make future strategic
changes even more likely." Reuters reported earlier this month
that Post Holdings  POST.N  is working with bankers on a
possible Lamb Weston deal. 
    Jana, which often partners with strategic and operating
partners, said in an earlier filing that it is working with
Continental Grain and that several executives, including former
Lamb Weston Executive Chairman Timothy McLevish, could be 
nominees.
    Lamb Weston's last annual meeting was held in September.
    

 (Reporting by Svea Herbst-Bayliss; editing by Diane Craft)
 ((svea.herbst@thomsonreuters.com; +617 233 2138; Reuters
Messaging: svea.herbst.thomsonreuters.com@reuters.net))