Bob Evans faces pressure from Thomas Sandell, CEO of Sandell Asset Management Corp. (SAMC), who has advocated spinning off the Bob Evans' food business, BEF Foods and a sale-leaseback transaction aimed at unlocking value embedded in company-owned restaurant properties.
Sandell Asset management noted in a securities filing that it had been contacted by several investment firms interested in the real estate and BEF Foods.
In the filing, Sandell Asset Management said: "SAMC has been contacted by a private equity firm interested in discussing a transaction involving the Issuer’s wholly-owned food products division, BEF Foods, as well as several investment firms interested in engaging in a transaction involving the Issuer’s real estate. Certain of these firms have also indicated their interest in providing financing for a transaction that may result in a change of control or acquisition of the Issuer. SAMC may engage in discussions with management of the Issuer, as well as its Board and other stockholders of the Issuer, with respect to these third party expressions of interest."
Bob Evans Farms has been challenged by difficult market conditions in addition to its boardroom battles. The company reported a first quarter loss of $1,016,000. Bob Evans Restaurants same-store sales declined 2 percent, while the company’s sausage business experienced a 19 percent decline in sausage pounds sold. The food business reported a 1.5 percent gain in sales compared with the prior year.
In August, Bob Evans announced that four board nominees proposed by Sandell were elected to the 12-member board at the company’s annual meeting. New York-based Sandell had assembled a list of 12 hand-picked candidates, while the board proposed 10 of its own nominees and two candidates picked by Sandell.