Tom Sandell‘s Sandell Asset Management, in a new filing with the Securities and Exchange Commission, disclosed that it filed a complaint against Bob Evans Farms Inc (NASDAQ:BOBE). Sandell holds currently around 1.7 million shares of the company, which represent 6.5% of the outstading stock. The complaint filed with the Delaware Court of Chancery asks the court for a judgement that Bob Evans’ board intention to deprive the company’s shareholders of their rights to amend the company’s bylaws was invalid.
“We find it outrageous that the Board unilaterally adopted, without shareholder approval, a requirement that an 80% supermajority shareholder vote be obtained in order for shareholders to amend the Bylaws. This amendment was made less than three months after shareholders had overwhelmingly voted to reduce such a supermajority requirement to a majority threshold, and in any event was made in contravention of the terms of the then existing, Board-proposed bylaw. We believe that the Board’s unilateral action to strip shareholders of their rights demonstrates this Board’s complete contempt for its shareholders” Thomas Sandell said in a statement attached to the filing.
Earlier Sandell tried to engage in discussions with Bob Evans Farms Inc (NASDAQ:BOBE) regarding possibilities to increase shareholders value of the company. The company, however, did not take any action with respect to the proposed measures, which, according to the shareholder, might raise the stock price of the company to over $80 per share. Bob Evans Farms Inc (NASDAQ:BOBE) later issued a reply to the letter, stating that the board considers that the measures proposed by Sandell are not in the best interest of the company and its shareholders.
In December, Sandell, in an open letter expressed its disappointed in the management of Bob Evans Farms Inc (NASDAQ:BOBE). The fund stated that it intents to launch a consent solicitation, which will allow the shareholders to seek for changes at the company.
“The more we investigate this Board, the more concerned we are at the numerous connections both among Board members themselves, as well as between various Board members and Steven Davis, that in our view reek of cronyism. We have become convinced that dramatic governance change is necessary to reign in what we believe are the irresponsible spending habits and poor decisions made by Mr. Davis, the Company’s Chairman and CEO. It is unfortunate that we are forced to go to court to preserve and enforce our rights, but we believe it is important that shareholders have as expansive an ability as possible to pursue meaningful change at Bob Evans. Fortunately, shareholders do not have to wait until the Company’s Annual Meeting to seek change, as they can take action by written consent,” Sandell also said.