Dive Brief:
- Activist investor Jana Partners LLC has taken aim at ConAgra Foods Inc., particularly its underperforming private-label foods business, Ralcorp.
- After buying stock in ConAgra earlier this year, Jana urged the company to "review its assets, cut costs and improve its operating performance" and has also suggested three board member nominees to help turn the company around. Jana now says it is prepared to launch a proxy fight if it can't come to an agreement with ConAgra.
- ConAgra announced it would have talks with Jana after releasing its Q4 earnings report on June 30.
Dive Insight:
ConAgra purchased Ralcorp for $5 billion in 2012 in the hopes of encouraging growth at a company "struggling with older brands that were losing ground with consumers," said The Wall Street Journal. But the private-brands business has proven to have more problems than ConAgra initially realized.
The purchase has "obviously been disappointing," said Thomas McGough, head of the consumer-foods division at ConAgra, on a March conference call, and that, "This has been more difficult and taken longer than we anticipated and planned."
In its last fiscal quarter, ConAgra reported a $952.7 million net income loss, in part due to notably lower profits from several of its private brands.