US-based TreeHouse Foods has agreed to add two new independent directors to its board after discussions with activist investor Jana Partners.
The largest private-label food manufacturer in the country has appointed John Gainor and Kenneth Tuchman with immediate effect.
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By GlobalDataNew York-based hedge fund Jana revealed in early February that it had taken a stake in TreeHouse, which has been in the throes of a restructuring exercise for the past three years under president and chief executive Steven Oakland, with the aim to trim the portfolio and boost margins.
Jana, which owns 7.4% of Illinois-based TreeHouse’s shares, said at the time it bought the stake because it considers they are “undervalued” and has been pushing for change at the company, partly through the nomination of new board members but also suggesting the business could be sold.
In a statement issued yesterday (2 March), TreeHouse announced an agreement with Jana in relation to the make-up of its board.
CEO Oakland said: “This is an important moment in our growth trajectory; we have made significant progress transforming the company, which is reflected in the strength of our 2020 performance, and we are well-positioned to drive growth and value over the long term.
“We share a common perspective with Jana that our current share price does not reflect the progress we have made and the value of our opportunities, business and outlook. I look forward to working with John, Ken and the rest of the board to focus on accelerating our momentum and achieving a stock price that reflects the true value of our business.”
Barry Rosenstein, managing partner of Jana Partners, said: “We are encouraged by the steps the company has been taking, including these director additions, and by the ongoing commitment to unlocking stockholder value.”
TreeHouse added that, in connection with the appointment of the two new directors, it and Jana have “entered into a cooperation agreement, including customary standstill and voting commitments”.
New board member Gainor is an experienced executive and director, most recently the president and CEO of International Dairy Queen from 2008 until 2017, after previously serving as its chief supply chain officer.
His fellow new board pick Tuchman has more than 35 years' experience as an investment banker and director who has worked with public and private, large and mid-cap company management teams. Most recently he was the vice chairman of the investment and corporate banking groups of Bank of Montreal Capital Markets.
Jana has a history of pushing for change at food and beverage companies. It took a more than 9% stake in Pinnacle Foods in April 2018 before it was acquired a few months later by Conagra Brands.
Read just-food'a analysis - Activist hedge fund raises questions over TreeHouse Foods strategy
