12-9-13 11:35 AM EST | Email Article

Activist investor Sandell Asset Management said it intends to file for a consent solicitation to make a number of operational changes at Bob Evans Farms Inc. (BOBE), including a possible spinoff of the Bob Evans food unit.

Sandell is the company's second-largest shareholder, with a 6.5% stake.

The hedge fund previously called on Bob Evans to transform its business as the company's shares have significantly underperformed peers in recent years. Sandell cited the company's "abysmal financial results" in the second quarter and deteriorating talks with the board in an open letter to shareholders.

"The financial results that Bob Evans recently reported paint a very troubling picture regarding not only the company's operating structure but the capital allocation decisions made by management," Sandell said.

Sandell said it has made repeated attempts over a five-month period to discuss ideas to unlock $80 per share of value in the company, but management and the board have taken no action on its suggestions.

A representative from Bob Evans declined to comment beyond referring to the company's comments last week on its earnings call. Chairman and CEO Steven A. Davis said the board vetted the suggestions with its outside advisors and unanimously concluded they aren't in the best interests of the company or its shareholders.

Previously, Sandell asked the company to consider a spinoff of its food unit for a potential $1.08 billion in proceeds. Sandell also suggested a share buyback plan after the spinoff, as well as a possible sale and leaseback of its restaurants.

The hedge fund said it learned at least one private equity group approached the company with an acquisition proposal, which was dismissed by Chairman and Chief Executive Steven Davis, signaling "a complete governance breakdown."

"As such, our consent solicitation will be aimed at swiftly empowering shareholders to seek change at the company," the investor said. "Importantly, shareholders do not have to wait until the company's annual meeting to effect change, as they can take action by written consent."

Bob Evans shares closed Friday at $51.31, with the stock up 28% year-to-date.

Write to Everdeen Mason at everdeen.mason@wsj.com

 

Subscribe to WSJ: http://online.wsj.com?mod=djnwires


(END) Dow Jones Newswires

December 09, 2013 11:35 ET (16:35 GMT)

Copyright (c) 2013 Dow Jones & Company, Inc.
Add a Comment

News   More...

Start Premium Trial Register For Free

P F Fund Financial Data (13,000+ funds)
P F Stock Financial Data (7,000+ stocks)
P F Stock and Fund Screeners (basic)
P F Investing Articles and Market Commentary
P F Articles Archive (>30 days)
P F Discuss (dozens of stock, fund, bond, and general bulletin boards)
P F Portfolio Manager (basic)
P F Morningstar Investment Classroom
P F Access Your Portfolio Anytime, Anywhere via Your Mobile Device
P   Morningstar Fund Analyst Reports (full research on 1,700 funds, ETFs, and CEFs)
P   Morningstar Stock Analyst Reports (full research on more than 1,100 stocks)
P   Portfolio Manager (advanced with 10 X-Ray analyses, including recommendations)
P   Portfolio Monitor (monthly and on-demand personalized portfolio statements)
P   Morningstar Proprietary Stock Information (stock star ratings, buy/sell prices, economic moat ratings, and more)
P   Morningstar 5-Star Stock and Fund Favorites & Red Flags eNewsletters
P   Premium Stock and Fund Screeners (advanced with nearly infinite ways to find the best securities for you)
P   Discounts on Morningstar newsletters, books, seminars, and more

Sign-up to Morningstar


Basic Access

Articles and Videos
Morningstar video reports, articles, data, and tools. Dig into our lineup of e-newsletters and investing classroom courses outlining sensible strategies for maximizing your investments.
Morningstar Discuss
Follow the buzz on individual stocks or fund families. Plus, read the latest posts from Morningstar members and analysts.
Portfolio Manager
Track your investments and watch lists with our Portfolio Manager. Customize your view with our comprehensive stock, fund, and ETF data.

Access these features and more when you sign up for Free Membership.
Join Morningstar today. It's Free.

Unlimited Access

Analyst Research
Gather in-depth, actionable insight on over 3,700 stock and mutual funds covered by Morningstar analysts. View our mutual fund Analyst Reports favored by professionals, savvy experienced investors, and new investors researching options for retirement savings, college plans, or other investment needs.
Portfolio X-Ray®
Ensure your portfolio is positioned exactly how you want with Morningstar's X-Ray Interpreter and Stock Intersection tools. A Barron's "Best of the Web" award winner for five years running, X-Ray Interpreter goes under the hood of your portfolio to provide a useful allocation, sector, and geographic analysis. And you can discover how much of a stock you really own, individually and through mutual funds, with Stock Intersection.
Investment Picks
Find new 5-star stocks (greatly undervalued companies) to consider daily. Our 5-star stock rating is a proven winner, consistently beating benchmarks like the S&P 500. Plus, browse our Fund Analyst Picks and Stewardship Grades to find shareholder-friendly mutual funds that are poised for outperformance.
Portfolio Monitor
Get a clear view of your investments with personalized reports about your portfolio. Receive monthly statements and generate reports on-demand to help you stay on track to meet your investment goals.

Access these features and more when you sign up for Premium Membership.
Start your free 14-day trial today online
Your subscription may be tax deductible. Please contact your tax advisor.

Content Partners
Morningstar - 2013/12/9 - Sandell to File Consent Solicitation at Bob Evans
Name |  Ticker |  Star Rating |  Market Cap |  Stock Type |  Sector |  Industry Star Rating |  Investment Style |  Total Assets |  Category |  Top Holdings |  Top Sectors |  Symbol |  Title Star Rating |  Category |  Total Assets |  Top Holdings |  Top Sectors |  Symbol |  Name Topic |  Sector |  Key Indicators |  User Interest |  Market Cap |  Industry Name |  Ticker |  Star Rating |  Market Cap |  Stock Type |  Sector |  Industry Star Rating |  Investment Style |  Total Assets |  Category |  Top Holdings |  Top Sectors |  Symbol / Ticker |  Title Star Rating |  Category |  Total Assets |  Symbol / Ticker |  Name Title |  Date |  Author |  Collection |  Popularity |  Interest Title |  Date |  Company |  Symbol |  Interest |  Popularity Title |  Date |  Company |  Symbol |  Interest |  Popularity Title |  Date |  Author |  Collection |  Interest |  Popularity

Previous: Sandell to Commence Consent Solicitation at Bob Evans Farms, Inc.  |  Next: Sanderson Farms earnings shy of Wall Street hopes