Activist investor Jana Partners has upped the ante on US cat and dog food supplier Freshpet, which continues to make a loss.

The US investment firm revealed in September it had bought more than four million shares in Nasdaq-listed Freshpet and called on the company’s board to evaluate the “strategic value in a sale” to potentially “significantly larger players” in the pet-food category.

In a fresh filing with the US Securities and Exchange Commission (SEC) signed off on Friday (15 December), Jana Partners said it had now informed Freshpet of its “intent to solicit proxies at the issuer’s 2023 annual meeting of stockholders”.

The same document shows Jana Partners and its associates hold 8.9% of the shares in the New Jersey-based business valued at US$170m.

US-based advisory firm AccountingTools says a proxy solicitation is a “request that someone else vote on behalf of a shareholder at a shareholders meeting” and that the “solicitation contains materials about the issuing entity that investors need to make informed decisions about shareholder votes”.

The proxy may typically seek to gain the vote of shareholders in terms of the election of directors to the board or in support of particular proposals.

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Jana Partners said in September it planned to enter discussions with Freshpet’s board to evaluate the “strategic value in a sale” with a view to “capitalising on interest in the category from significantly larger players with lower costs of capital, strong operational capabilities, global footprints and greater scale”. And the investment firm added it reserved the right to “propose” new directors to the board.

Freshpet has yet to respond to Just Food’s request for comment on the latest development.

When approached in September at the time of Jana Partners’ SEC announcement, the company said: “We are aware of the news that Jana has made an investment in Freshpet. While we have not yet spoken to Jana, we welcome new investors in Freshpet and look forward to hearing their perspectives.”

Freshpet produces chilled cat and dog foods using natural ingredients sold through retail – mass, grocery and club stores, natural food channels and specialist pet outlets – in the US. It also exports to Canada and Europe, and sells online via its website.

The company’s most-recent results issued in November show Freshpet’s net losses widened in the third quarter and the nine months to 30 September despite an increase in sales, while EBITDA plunged.

The third-quarter bottom-line loss was $18.4m, compared to a $2.1m loss a year earlier. Year-to-date, it widened to $56.6m from $20.4m.

Adjusted EBITDA for the quarter dropped to $3.5m from $13.5m and over the nine months fell to $1.3m from $27.4m.

Sales were up 40.7% in the three months at $151.3m and increased 38.7% to $429.5m for the year so far.

Freshpet said in the third-quarter commentary: “The increase in net loss was due to increased SG&A, which includes increased media spend of $7.2m and increased plant start-up cost of $7.4m, partially offset by contribution profit from higher sales.”

CEO Billy Cyr added: “We delivered a strong, on-plan quarter. More importantly, we are executing on our plan to address the cost challenges and improve margins. While it is still early, we are attracting the high-quality talent we need, taking the necessary remedial actions, and putting in place the systems needed to further improve our performance. The benefits of those efforts should become increasingly apparent in the quarters ahead.”