Sandell Asset Management, an activist investor with shares in Bob Evans Farms, has urged the firm to sell off its packaged foods business after reportedly receiving interest from Post Holdings.
In an open letter to Bob Evans’ board of directors, Sandell wrote it had been told by “knowledgeable sources that Post had expressed an interest in pursuing a transaction with Bob Evans involving its packaged foods business, BEF Foods, within the last year.”
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The letter emphasised: “Furthermore, we understand that Post has a continuing, strong interest in pursuing a transaction with Bob Evans involving BEF Foods, and has the ability to creatively structure a transaction in a manner that could reduce or eliminate the tax consequences to Bob Evans. Note that Post is a publicly-traded company with a market value in excess of $4.5bn that could use both cash and stock as acquisition currency, as well as one or more underlying business units such as Michael Foods that could serve to facilitate the formation of a joint venture or other such arrangement with BEF Foods.”
In justification for the “compelling industry logic” to separating BEF Foods the letter added the timing was right given the new CEO, Saed Mohseni, “does not appear to have an extensive food products background, he has an enormous wealth of restaurant experience”.
“His efforts to re-position the Bob Evans Restaurant business for greatness should not be distracted by the continued presence of BEF Foods,” it added.
A spokesperson for Bob Evans Farms told just-food: “We at Bob Evans welcome feedback from our shareholders. We have maintained an active dialogue with the Sandell Group about our business. Our Board is focused on ways to improve performance and enhance shareholder value and will continue to review ways to accomplish these goals”.
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By GlobalDataPost Holdings was not available for comment at time of press.
