JANA Partners Calls for Major Changes at Lamb Weston Holdings

JANA Partners, an influential shareholder of Lamb Weston Holdings, Inc. (NYSE:LW), has advocated for a significant overhaul of the company's board and leadership. In a letter released on Monday, the activist investor group urged for changes to enhance shareholder value and suggested the consideration of a sale if these changes are not implemented.

The group, which owns over 5% of Lamb Weston's shares, expressed disappointment with the company's recent performance. JANA highlighted Lamb Weston's underperformance against the S&P 500 and its peers over the last five years, noting a notably weak earnings report in 2024, described as one of the worst for a large-cap food producer in recent times.

JANA's letter identified several leadership failures, including financial and operational issues allegedly resulting in nearly $400 million in EBITDA losses over the past two and a half years. The investor criticized customer relationship missteps, inaccurate forecasting, a problematic ERP project, and product quality issues, all of which contributed to significant financial losses and damaged the company's reputation.

The activist investor further criticized Lamb Weston’s capital allocation and executive compensation practices, arguing that they do not align with shareholder interests. Concerns were raised over questionable capital expenditures, stock buybacks preceding earnings disappointments, and executive pay targets that fail to reflect the company's actual performance.

JANA also questioned the use and transparency of Lamb Weston's aviation assets, bringing forward inquiries regarding the business use of the company's corporate plane based on their review of flight records.

This push for change follows reports that Post Holdings (NYSE:POST) is in talks with bankers to consider acquiring Lamb Weston. Following JANA’s announcement of its stake in the company on October 18, 2024, Lamb Weston’s market value reportedly increased by $1 billion, indicating market interest in new directions for the company.

The letter concluded with JANA offering to work alongside Lamb Weston’s Board to implement changes and improve performance. However, the investor group cautioned that if the Board is unwilling to enact substantial changes, exploring a sale would serve as the best option for returning value to shareholders.

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