Activist Investor Barry Rosenstein Enters Into Agreement With ConAgra Foods Inc. (CAG); Board Expanded To 14 Members

Both JANA Partners and ConAgra Foods are confident that the freshly-appointed board members possess the necessary expertise, experience, and focus on shareholder value to assist the packaged food maker in evaluating and undertaking the growth opportunities that come its way so as to create shareholder value. Bradley A. Alford and Timothy R. McLevish will indisputably take on a strategic review of ConAgra’s strategy and corporate structure so as to assess whether the company is well-positioned to succeed. At the same time, they might also consider other alternative transactions that the company might embark upon, such as tackling the operational performance and cost structure of the company, and attempt to optimize its capital structure and allocation policies.  Indeed, there is still a long way to go until ConAgra achieves operational efficiency and solves the challenging issues within the company. However, it is promising that ConAgra has woken up to the reality that in order to succeed in the long term, cooperation is the way to go.

Let’s now take a quick glance at ConAgra’s most recent financial results in order to get a shallow understanding of the company’s financial performance. On June 30, ConAgra Foods reported diluted EPS from continuing operations of $0.47 per share for the fiscal fourth quarter of 2015 that ended May 31, compared to a loss of $0.95 registered in the same quarter a year ago. ConAgra Foods has repaid roughly $1.1 billion of debt during the current fiscal year, which marks a $2.1 billion cumulative debt reduction since the completion of the Ralcorp transaction mentioned above. Therefore, it seems that the company has been quite successful in managing its debt levels at the very least. Even more to that, ConAgra has seen increased productivity lately in some of its segments, which is evidenced by operating profit growth. For instance, the Consumer Foods segment posted an operating profit of $304 million for the quarter, which is significantly higher than the $176 million figure reported a year ago.

Within our database, Phill Gross and Robert Atchinson’s Adage Capital Management and Ken Griffin’s Citadel Investment Group represent the largest shareholders of ConAgra Foods Inc. (NYSE:CAG) after JANA Partners, with ownership of 3.86 million shares and 3.50 million shares, respectively.

Disclosure: None