Overhill Farms has received a letter from one of its shareholders urging the company to sell the business amid “concern” over its “underperformance” and current stock price.
Cordoba Asset said in a statement today (18 March) that it had delivered an open letter to the board of directors of the US frozen-food firm. The letter, the shareholder said, expressed “concern” that at its current stock price the market was giving “little value to the future earnings power” of the business and values Overhill “slightly above its liquidation value”.
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Cordoba added that the company’s “underperformance” was largely attributable to “poor management execution”. The firm said management has “continued to hide behind excuses, blaming a poor economy and high commodity costs for its failures”, adding that Overhill’s returns place it at the bottom of its peer group.
“Cordoba stated that the best path to maximize value for shareholders is through the sale of the company as a whole,” it said in the statement. “Accordingly, Cordoba concluded that the board should immediately abandon all non-sale transactions and take the necessary steps to commence a formal process to fully explore the sale of the company to the highest bidder.”
Last month, the company saw its first-quarter profits slide after a shift in product mix, less favourable commodity prices and increased costs weighed on margins. Alongside the results, Overhill revealed it was in talks over a mystery transaction with an unnamed entity.
The company did not have a response when contacted by just-food.
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