A Look at Jeffrey Smith, Starboard Value’s Potential Activist Targets

Bemis Financials

In the beginning of February, Bemis Company Inc (NYSE:BMS) has announced a 35th consecutive annual dividend increase, raising its quarterly dividend to $0.31 per share from $0.3 per share, providing shareholders with a 2.8% yield. On an annual basis, the company’s revenues had been falling for a long time, however 2017 was the year it managed to break the trend. Bemis reported $4.05 billion in revenues for the year, which surpassed 2016 sales which came in at a little over $4 billion.

Last year, Bemis introduced an improvement plan called “Agility”, embarking on a restructuring and cost cutting plan which aims to generate a total of $65 million in pre-tax annual savings. Bemis is also looking to change its organizational structure and focus more of its R&D efforts towards manufacturing improvements in a bid to strengthen and grow its business. The management promised shareholder it would consider selling the company should it fail to complete the Agility plan. Although Bemis has put the plan to action and has already registered the first positive results, as long as Starboard is keeping an eye on Bemis, one can never rule out a potential sale of the company.

Opportunities in Real Estate

One would expect Jeffrey Smith and Starboard to be the ones pushing a company to sell itself rather than joining the fray when the company is already in negotiations, but that’s what apparently happened with Forest City Realty Trust Inc (NYSE:FCE.A). In its latest quarterly filings, the fund indicated ownership of 5.33 million shares, up 59% from the previous quarter. However, since there was no 13D filing, we cannot say for sure if Jeffrey Smith has in any way influenced Forest City’s decision to sell itself.

On January 31, Brookfield Asset Management Inc announced it is in talks to acquire Forest City Realty Trust Inc (NYSE:FCE.A). Although the actual price was not disclosed, it is believed to have been at a very low premium compared to where the stock was trading when the talks were announced. The Cleveland-based Real Estate Investment Trust had been the target of activist investor Land & Buildings Investment Management, led by Jonathan Litt, a former real estate analyst. Land & Buildings has advocated for a sale of the company and has said in a letter dated April 2017 that Forest City would attract numerous bidders. Land & Buildings has since sold its stake. In September 2017, the company said it would consider selling itself as an option to increase shareholder value.