US activist investor Engaged Capital has bought just short of 10% of Hain Celestial and has lined up seven candidates for nomination to the US food group’s board at its next annual shareholders meeting.
In an SEC filing yesterday (29 June), Engaged Capital, which has taken a 9.9% stake in Hain Celestial, said shares in the Earth’s Best baby food maker were “undervalued and represented an attractive investment opportunity”.
The fund said it had “engaged in communications and intends to continue to engage” with Hain Celestial’s board and management “regarding means to create stockholder value”.
Depending on factors including Hain Celestial’s financial position, investment strategy and the price of the company’s shares, Engaged Capital said it could put forward proposals to the business on a range of issues, including a possible sale of the group.
Bloomberg, citing an unnamed source, said Engaged Capital believed Hain Celestial could attract offers between US$46 and $73 a share based on deals done in the sector like General Mills’ 2014 purchase of US organic food business Annie’s and Danone‘s acquisition of WhiteWave Foods, which was sealed earlier this year.
Engaged Capital also believes there is an opportunity to increase Hain Celestial’s revenue and operating margins by streamlining its supply chain and range of products, the source told Bloomberg.
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Shares in Hain Celestial, down more than 8% so far in 2017, jumped in pre-market trading today, climbing 10.96% to US$39.68.
Officials at Hain Celestial had not returned a request for comment at the time of writing.