|From: singhtelecom (Rep: 974)||Date: 06/04/2018 22:36|
|Forum: SUPERVALU - Msg #185||Thread #674012986 (Rec: 0) |
|What’s Happening: Blackwells has nominated six candidates to the nine-person board.|
7.3%: percentage of shares owned by Blackwells
(33.3%), (70.93%), (61.16%): Supervalu’s one-, three-, and five-year stock returns
Behind the Scenes: This is Blackwells’ first 13D filing. At its initial contact with Supervalu, on Oct. 25, it pointed out its severe underperformance and recommended that the board unlock the value of its real estate by selling 30% of its grocery stores, rolling out delivery and meal-prep services, energizing board and management, and improving investor communications and capital allocation.
Since October, Supervalu has expanded its wholesale business by acquiring Unified Grocers and Associated Grocers of Florida; agreed to sell a majority of its Farm Fresh Stores and pharmacy assets; and announced a sale-leaseback transaction for eight of its distribution centers.
Blackwells calls these changes “ineffective half-measures.” It believes fundamental changes are needed at the board level to hold management accountable, drive growth and margins, and sell or spin off the retail and/or wholesale businesses.
Blackwells has shown strong commitment for a first-time activist, but also its lack of experience. It nominated the majority of a new board without asserting any egregious activity by the old board. Large institutional shareholders are very reluctant to support a majority board change. With its large institutional shareholder base, Blackwells will be fighting an uphill battle.
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