By Svea Herbst-Bayliss
(Reuters) -Jana Partners has built a new position in Lamb Weston and could prompt the chip maker to consider selling itself, the activist investment firm said in a regulatory filing on Friday.
Jana said it owns 5% of the Eagle, Idaho-based company and wants to see a strategic review in which the company and bankers would assess capital expenditures, operating shortcomings and its stock buyback strategy.
The hedge fund also indicated it may seek board seats at the $11 billion market cap company.
News of Jana’s stake pushed Lamb Weston shares up 11% to $78.78. Since January, the stock has fallen 26%.
Jana is working with Continental Grain, a private company that owns and operates food and agribusiness companies, on the investment, the filing said. It is also working with former Lamb Weston executive chairman Timothy McLevish.
The company said it is aware of the regulatory filings from Jana and Continental Grain.
“We engage regularly with our shareholders to better understand and consider their views and will continue to do so,” a representative said.
This month, Lamb Weston cut its annual profit forecast and announced job cuts, amid lower spending in restaurants and increased competition in international markets.
In the filing, Jana Lamb blames Weston for the problems, writing of a “litany of self-inflicted missteps” that led to subpar performance.
As North America’s largest producer of French fries, Lamb Weston sells its products, including tater tots and hash-brown patties, to customers including hamburger chain McDonald’s (NYSE:).
A year ago, Jana called on Frontier Communications (OTC:) to sell itself and Verizon Communications (NYSE:) made an offer last month. At the time, the hedge fund was also working with a large strategic investor that it had not identified.
Jana previously pushed for a sale of New Relic (NYSE:), which was taken private last year by TPG and Francisco Partners. It also pushed for a sale of Zendesk (NYSE:), which was taken private in 2022 by investment firms led by Hellman & Friedman and Permira.
