Jana Partners, an activist investor in the US-based French fries manufacturer Lamb Weston, has publicly criticized the company’s recent decision to appoint its COO as the new CEO.
On December 19, Lamb Weston announced that Michael Smith will assume the roles of CEO and president effective January 3.
Smith will take over from Tom Werner, who is stepping down as both CEO and board member but will stay on in an advisory role until August.
Despite advocating for a leadership change, Jana Partners expressed disappointment following Smith’s appointment.
The activist investor acquired a 5% stake in Lamb Weston, worth $336 million, this past October and stated that “the board has completely failed shareholders.”
“Enough is enough: Lamb Weston requires significant board change or, in its absence, should be sold,” Jana Partners emphasized.
On December 16, Jana Partners sent a letter urging Lamb Weston’s executive team to leverage the second-quarter results announcement as an opportunity to address prior calls for “significant board and leadership change.”
Alongside promoting Smith, Lamb Weston disclosed second-quarter results yesterday, revealing declines in both net sales and EBITDA. Furthermore, it reduced its forecasts for sales and profits.
Additionally, Lamb Weston adjusted its net income and EPS targets during its first-quarter results stage in October. This announcement coincided with the planned closure of its Connell, Washington facility and significant job reductions as part of a cost-saving strategy.
In the meantime, 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.
