Shareholders of the company will vote Aug. 20 for a full slate of nominees to the Bob Evans' board. New York-based Sandell Asset Management assembled a list of 12 hand-picked candidates. But current board members have dug in their heels insisting that Sandell's plans for the company are "unsustainable".
"While the Bob Evans board welcomes ideas for operational improvements from stockholders, customers and employees, it finds Sandell’s ideas of limited utility, since they either lack substance or already are being implemented by the company,” the board said in a statement.
Thomas Sandell, CEO of the investment firm, has recommended spinning off the Bob Evans food business; a sale-leaseback transaction aimed at unlocking value embedded in company-owned restaurant properties; or a large self-tender. Sandell, known as an activist investor, said implementing his recommendations could generate approximately $1 billion.
But the Bob Evans board isn't buying in to Sandell's rationale, pointing out that three proxy advisory services recommended against a complete overhaul of the company's management. ISS recommended approving only four of the 12 Sandell picks, while Glass Lewis recommended a 50-50 split, which the Bob Evans board soundly rejected.
“We are pleased that a third advisory service has concurred in not recommending that Sandell Asset Management nominees take control of the board,” Michael Gasser, lead independent director said. “We are nevertheless concerned that splitting the board down the middle, as suggested by Glass Lewis, would create the potential for a sharply divided board that would be challenged to agree on the best strategy and direction for the company.”
The board proposed 10 of its own nominees and two candidates picked by Sandell. But Sandell, who has been openly critical of the Bob Evans board, said the time had come for “forward-thinking, truly independent executives” to take control of the company.
“We believe the time has come for accountability and comprehensive change at Bob Evans,” Sandell said in a statement. “If elected, the nominees will work with any incumbent members of the board that stay in office as a cohesive team, drawing upon each of their unique skills as they seek to effect positive change that we believe should encompass improvements to the company's operational, financial, and strategic policies. The nominees will bring desperately needed new insight, operational expertise, and a fresh perspective to the board and will embrace the highest standards of governance.”