2023-03-15 11:26:33 ET
Freshpet ( NASDAQ: FRPT ), whose shares sunk 10% on a new capital raise plan, drew instant rebuke from activist Jana Partners, one of the pet food company's largest holders.
“We are astonished that Freshpet’s board has elected to initiate a large equity-linked capital raise in a fragile market reeling from a systemic crisis in the banking system, and with the Company’s shares trading at less than 50% of their 52-week high," Jana Partners, which has an 8.6% stake in Freshpet ( FRPT ), said in a statement on Wednesday. "Equally baffling is the board’s decision to choose this moment to pursue a substantially larger capital raise than immediately needed."
Jana's latest comments come after the activist in December informed Freshpet ( FRPT ) that it intended to solicit proxies at the 2023 annual meeting. Jana bought shares in September and said it intended to hold talks with management regarding costs and operational capabilities. Barron's reported in early October that Freshpet had hired bankers to explore a potential sale .
Jana said on Wednesday that Freshpet ( FRPT ) required either "significant" board change or in the absence of boardroom change, a sale of the company should occur.
Last month a Bernstein analyst suggested that Freshpet ( FRPT ) could be a potential target for J.M. Smucker ( SJM ) after the company agreed to sell several of its pet-food brands to Post Holdings ( POST ) for $1.2 billion. J.M. Smucker implied that it will use the deal proceeds to look at another transaction.
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Freshpet slumps on new capital raise, activist Jana calls move `ill-conceived'