Jana Partners Pressuring TreeHouse Foods

Feb. 11, 2021
Investment firm with 7.5% stake wants a strategic review, possible sale.

Activist investor Jana Partners, which has amassed a 7.5% stake in TreeHouse Foods, has asked the private label powerhouse to launch a strategic review, according to reports, including exploring a potential sale and to put three Jana representatives on the TreeHouse board of directors.

TreeHouse, which announced improved 2020 financials today (Feb. 11) sounded surprised in its response. The company said it's "held multiple discussions with Jana in the spirit of maintaining constructive dialogue. During those conversations, Jana expressed strong support for the actions TreeHouse has taken to drive growth and profitability and enhance stockholder value."

TreeHouse said it's "open to constructive input from all stockholders. The Board's Nominating and Corporate Governance Committee will review JANA's nominees in accordance with its process."

TreeHouse is rebuilding after a disastrous spurt of acquisitions, which culminated in what looked like a bargain-priced acquisition of Conagra's private label business in 2016. Sales peaked that year at more than $6.1 billion but declined in three straight subsequent years -- although they grew 1.4% in 2020 to $4.350 billion. Net income last year was $49 million, up from a 2019 loss of $110 million.

Steve Oakland was hired as CEO in 2018 to replace founder Sam Reed. Oakland has reorganized the company and sold off many businesses, although late last year he made the company's first acquisition in years, buying the mostly branded pasta business of Riviana Foods.

Bloomberg News reported that Jana, which was founded by Barry Rosenstein, has a history of pushing for consolidation among consumer goods companies, including pressuring Whole Foods Market Inc. before it was sold to Amazon in 2017. It also pushed for the sale of Pinnacle Foods, PetSmart and Safeway before they were sold.

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