In a recent interview on CNBC, Tom Sandell, the manager of Sandell Asset Management explained his position towards Bob Evans Farms Inc (NASDAQ:BOBE), a company on which he has been bullish for quite some time. Mr. Sandell is seeking some strategic changes at the company, which could unlock more value for shareholders. In the meantime, Mr. Sandell solidified his position in the company, holding over 2.0 million shares (including options), which are equal to 8.1% of the outstanding stock. Overall, Sandell’s stake has been upped from around 503,900 shares held by the fund at the end of June 2013.
During his interview, Mr. Sandell stated that his fund, being a shareholder of Bob Evans Farms Inc (NASDAQ:BOBE) for some time, tried to engage in discussions with the Board to seek changes in order to increase the value of the company. However, the board has ignored these attempts, and Sandell has proposed eight independent directors to be elected to the company’s board. None of the directors are affiliated with his fund.
According to a press release issued today, among the directors proposed by Sandell, are Doug Benham, the former President and CEO of Arby’s Restaurant Group, David Head, ex-President and CEO of O’Charley’s Inc., the former CEO of Triarc Beverage Group (Snapple Beverage Group), Michael Weinstein, and others. Following the announcement, the stock of Bob Evans Farms Inc (NASDAQ:BOBE) advanced and has already gained 5% today.
“The company has underperformed their peers by 130% in the equity markets over the past five years and they have a corporate waste, for example their operating margins are 500 basis points lower than the peer group. It’s frankly very disappointing, their stock price is trading at $47 right now, we feel there is $90 in value, real estate is worth $37 by itself,” Sandell said during his interview.
The full interview can be watched below:
Earlier this year, Sandell filed a complaint regarding the bylaw changes made by the board and its intentions to deprive the shareholders of their rights to amend the bylaws. However, later Bob Evans Farms Inc (NASDAQ:BOBE) has reversed the changes, and the fund has withdrawn the lawsuit.