{"id":795048,"date":"2024-12-16T08:23:08","date_gmt":"2024-12-16T13:23:08","guid":{"rendered":"https:\/\/www.marketnewsdesk.com\/index.php\/jana-partners-sends-letter-to-board-of-directors-of-lamb-weston-holdings\/"},"modified":"2024-12-16T08:23:08","modified_gmt":"2024-12-16T13:23:08","slug":"jana-partners-sends-letter-to-board-of-directors-of-lamb-weston-holdings","status":"publish","type":"post","link":"https:\/\/www.marketnewsdesk.com\/index.php\/jana-partners-sends-letter-to-board-of-directors-of-lamb-weston-holdings\/","title":{"rendered":"JANA Partners Sends Letter to Board of Directors of Lamb Weston Holdings"},"content":{"rendered":"

<\/p>\n

JANA Partners Sends Letter to Board of Directors of Lamb Weston Holdings<\/b><\/p>\n

Believes Significant Board and Leadership Change Is Necessary to Improve Performance<\/i><\/p>\n

Absent Meaningful Board and Leadership Change, Lamb Weston Should Launch a Formal Review of Strategic Alternatives to Maximize Value for Shareholders<\/i><\/p>\n

NEW YORK–(BUSINESS WIRE<\/a>)–
\nJANA Partners (\u201cJANA\u201d), which together with its strategic and operating partners owns more than 5% of Lamb Weston Holdings, Inc. (NYSE: LW) (\u201cLamb Weston\u201d or the \u201cCompany\u201d) and is one of the Company\u2019s largest shareholders, today sent a letter to the Company\u2019s Board of Directors reiterating its belief that significant Board and leadership change is needed at Lamb Weston, and that in its absence the Company should pursue a formal review of strategic alternatives, including a sale, in order to maximize value for shareholders.<\/p>\n

\nThe full text of the letter is as follows:<\/p>\n

\nDecember 16, 2024<\/p>\n

\nBoard of Directors
\n
Lamb Weston Holdings, Inc.
\n
599 S. Rivershore Lane
\n
Eagle, ID 83616<\/p>\n

\nBoard of Directors,<\/p>\n

\nJANA Partners (\u201cJANA,\u201d \u201cwe\u201d or \u201cus\u201d) together with our strategic and operating partners beneficially own more than 5% of the outstanding shares of Lamb Weston Holdings, Inc. (\u201cLamb Weston\u201d or the \u201cCompany\u201d), making us one of the Company\u2019s largest shareholders. Having received no response from the Board to our months-long involvement and engagement, we are hopeful that the Company will use the upcoming fiscal second quarter earnings announcement to address our previously expressed view that significant Board and leadership change is needed at Lamb Weston, and that in its absence the Company should pursue a formal review of strategic alternatives, including a sale.<\/p>\n

\nWe believe Lamb Weston\u2019s Board and management have wasted the chance to sustain and grow shareholder value in a high-quality business. It is indisputable that Lamb Weston\u2019s track record for shareholders prior to the disclosure of our investment has been poor, not only in a disastrous 2024 (which includes an earnings report so ignominious that it prompted one long-tenured analyst to declare it \u201cone of the worst days for a larger-cap food producer in modern history\u201d),1<\/sup> but also over the long-term with total returns in the last five years2<\/sup> dramatically trailing the S&P 500 and performing in the bottom quartile when compared to proxy peers.<\/p>\n

\nRegrettably, we believe this dismal performance record significantly understates<\/span><\/i> the magnitude of lost opportunity at the Company. Relative to its publicly traded packaged food peers, we believe Lamb Weston enjoys the benefits of an attractive end market, a strong industry position and key competitive advantages (including geographic ones). When coupled with Lamb Weston\u2019s long-time reputation as a premier foodservice supplier \u2013 which took prior management many years to build \u2013 we think these attributes should have positioned the Company as an attractive \u2018compounder\u2019 stock and best-in-class performer for investors.<\/p>\n

\nInstead, the current Board and management have overseen a multi-year period of uncorrelated failures across many major elements of operating the business, in the process damaging the Company\u2019s reputation and leading market position. This has impaired performance, dissolved confidence among customers, investors and other stakeholders and caused Lamb Weston to veer off its path as a world-class business.3<\/sup><\/p>\n

\nThe disclosure of our involvement on October 18th<\/sup> led to an approximately $1 billion increase in Lamb Weston\u2019s market cap and an overwhelmingly positive reception from investors and Wall Street analysts,4<\/sup> which we believe demonstrates the intense appetite from shareholders for a change in direction. The extensive investor feedback we have received since emerging publicly in the Company, including proprietary survey work that has included dozens of investors and other stakeholders, has further confirmed what was clear from our initial due diligence: that there is urgent need \u2013 and strong desire \u2013 for significant Board and leadership change at Lamb Weston.5<\/sup><\/p>\n

\nA failure of Board oversight has permitted chronic mis-execution, a bloated expense structure, poor capital allocation and questionable use and disclosure practices involving the Company\u2019s aviation assets. Making matters worse, the Board has supported management as Company leadership has attempted to place primary blame for the Company\u2019s challenges on end market softness \u2013 rather than offering a long overdue mea culpa<\/i> and acknowledging the magnitude of damage inflicted on the business and investors from its litany of self-inflicted missteps.6<\/sup> This contradicts what we believe to be an environment where the Company\u2019s primary competitors (all private companies) have enjoyed stronger performance at Lamb Weston\u2019s expense. This disconnect has not been lost on the investors and other stakeholders we have spoken with or who took part in a proprietary survey.7<\/sup><\/p>\n

\nLamb Weston\u2019s failures include:<\/p>\n