Overhill Farms has said a letter sent by shareholder Cordoba urging the company to sell up offers “inaccurate depictions” of its operations and is potentially harmful to opportunities being pursued.
The US frozen-food firm was this week sent an open letter by Cordoba Asset expressing “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”. The shareholder, which claims to hold 1.5% of stock, urged the company to sell its operations.
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“The best path to maximize value for shareholders is through the sale of the company as a whole,” it said in the statement. “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.”
Overhill, however, said the letter, which was sent without any attempt to contact the company to discuss Cordoba’s perceptions, had suggested strategies the company is already exploring, was “factually incorrect” and “potentially harmful” to opportunities the company is pursuing.
“As we have previously informed shareholders, the board and management team, working with Piper Jaffray, have been deeply involved for a number of months in exploring a wide range of options intended to maximize shareholder value,” said Overhill Farms CEO James Rudis. “There is no reason for the company to suddenly abandon any strategy.”
Rudis said the letter contained “nothing new or helpful” and reflected a “misunderstanding” of the company’s business strategy. It was also made public, he said, when he was at the Piper Jaffray offices in New York discussing a potential transaction
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By GlobalData“Dissemination of the letter, with its inaccurate depictions of the company’s operations and prospects, adversely affected those discussions and has the potential to negatively affect shareholder value.
“All of this could have been avoided if Cordoba Asset had simply contacted us to discuss its perceptions.”
