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JANA Partners Shows New 7.2% Stake in ConAgra Foods Inc. (CAG)

June 18, 2015 4:47 PM EDT

In a 13D filing on ConAgra Foods Inc. (NYSE: CAG), hedge fund JANA Partners disclosed a 7.2%, or 30,863,322 share, stake in the company. The firm did not hold shares at the end of the latest quarter ending March 31, 2015.

In part, JANA said it may seek to take board seats.

From the filing:

The Reporting Persons acquired the Shares because they believe the Shares are undervalued and represent an attractive investment opportunity. JANA believes that the Issuer has significantly underperformed in shareholder value creation. Most significantly, the acquisition of Ralcorp Inc. in January 2013, which in JANA’s opinion was the most significant recent strategic decision made by the Issuer’s Board of Directors (the “Board”), has been followed by disappointing performance for shareholders, repeated guidance misses, negative revisions to long term earnings targets, no dividend per share growth, and operating performance challenges. Issues with this acquisition led to the Issuer taking a $1.3 billion impairment on March 26, 2015, after which JANA began purchasing the Shares and analyzing opportunities for improved shareholder value creation. JANA believes that in the period since the Ralcorp acquisition, the Board has failed to adequately address the shareholder value destruction and persistent underperformance that followed the Ralcorp acquisition.

JANA is prepared, if necessary, to nominate Messrs. Alford, Lawrence and Rosenstein (collectively, the “Potential Nominees”) for election to the Issuer’s board of directors and to participate in the solicitation of proxies in support of the Potential Nominees. JANA believes that the Potential Nominees possess the necessary expertise, experience and focus on shareholder value to help the Board evaluate and address opportunities for shareholder value creation, including but not limited to: undertaking a strategic review of the Issuer’s strategy and corporate structure to determine if its businesses are optimally positioned to succeed, as well as various potential alternative transactions and structures; addressing the Issuer’s operational performance and cost structure; and optimizing the Issuer’s capital allocation policies and capital structure. JANA has requested, however, that the Issuer delay the June 21, 2015, deadline to submit notice of stockholder nominations for the Issuer’s 2015 annual meeting of stockholders (the “Annual Meeting”) in order to give the Issuer and JANA more time to have collaborative discussions regarding the steps JANA believes the Issuer should take to maximize shareholder value, as well as why JANA believes stockholders would benefit from the addition of the Potential Nominees to the Board.

For more notable holders of ConAgra Foods Inc. stock click here. For more information on JANA Partners click here.



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