Jana Partners has advanced three nominees for a proxy fight at Treehouse Foods.
Jana, which owns 7.5% of the stock, nominated Meredith Adler, John Paul Gainor Jr., and Charles Myers, adding in a regulatory filing that the company should consider capping its three-year turnaround plan with a sales process.
In an after-hours Wednesday statement on the impending proxy contest, Treehouse said it has had “multiple discussions” with Jana. The company claimed Jana expressed “strong” support for several actions taken to improve operating performance and cash flow as well as the recent purchase of several pasta brands from Riviana Foods.
Treehouse said it would review Jana’s nominees while noting that it remains “open to constructive” dialogue with Jana and other investors.
Treehouse, which had a market capitalization of $2.4 billion at Tuesday’s close, rose 14.6% at Wednesday’s open following the filing.
The Illinois-based packaged foods producer has long seemed an obvious target for activists, with Activist Insight Vulnerability suggesting in 2017 that it was suffering from margin compression. Three dedicated activist funds have held the stock in the past five years but none have advanced a public demand.
Treehouse ranked in the 99th percentile of companies likely to be targeted by an activist as of yesterday’s close, according to Activist Insight Vulnerability.
For Jana, the move falls into a well-worn strategy. Barry Rosenstein’s fund was instrumental in the breakup of ConAgra Foods, which sold its private label business to Treehouse in 2016. The activist has long targeted food retail and production companies, including Safeway, Whole Foods Market, ConAgra, and Pinnacle Foods.
Treehouse is due to report earnings on Thursday.
The company has 12 directors and 10 of them are considered independent. Six of the sitting independent directors were added in the last three years.