Jana Partners, an activist investor in US-based French fries manufacturer Lamb Weston, has criticised the company’s decision to appoint the company’s COO as its new CEO.
Yesterday, Lamb Weston announced Michael Smith will take the reins as CEO and president from 3 January.
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Smith will replace Tom Werner, who is stepping down from his role as CEO and board member but will remain with the company in an advisory capacity until August.
Jana Partners had called for a change of leadership at the company but, in a statement after Smith’s appointment was announced, hit out at the decision.
The activist investor, which acquired a 5% stake in Lamb Weston in October for $336m, added the “board has completely failed shareholders”.
“Enough is enough: Lamb Weston requires significant board change or, in its absence, should be sold,” Jana Partners said.
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By GlobalDataIn a letter on Monday, 16 December, Jana Partners urged Lamb Weston’s executive team to use the second-quarter results announcement as an opportunity to address its earlier calls for “significant board and leadership change”.
As well as promoting Smith, Lamb Weston yesterday filed second-quarter results that included falling net sales and EBITDA. It also cut its forecasts for sales and profits.
Lamb Weston also lowered its net income and EPS targets at the first-quarter results stage in October, as the frozen potato products supplier also announced the closure of its Connell, Washington, facility and a raft of job cuts as part of a cost-savings exercise.
Post Holdings, a US food company, has reportedly expressed interest in acquiring the frozen potato products supplier.
On Tuesday, the company announced the acquisition of Potato Products of Idaho (PPI), a manufacturer of refrigerated and frozen potato products.
