Feb 26 (Reuters) – J.M. Smucker on Thursday agreed with activist hedge fund Elliott Investment Management to add two executives with financial and food industry experience to its board, making the announcement on the same day the company beat expectations for third-quarter profit and sales.
Shares of the jellies and peanut butter maker rose more than 8% in premarket trading.
As one of the world’s most powerful investors, Elliott’s involvement is often viewed as bringing new ideas and financial discipline, analysts have said.
The Orrville, Ohio-based company also known as Smucker’s recently pledged to halt new takeovers – a move that analysts said had calmed investor worries.
Smucker’s has a market value of $11.4 billion, and its shares have fallen 2.4% over the past 12 months to $106.60.
Woo-Sung Chung, chief financial officer of NRG Energy, and David Singer, former chief executive of Snyder’s-Lance, will join the board in April, increasing its size to 11, the company said.
The company, which owns Jif peanut butter, Uncrustables frozen sandwiches and Hostess baked snacks, and Elliott, which manages about $80 billion and has pushed for changes at companies including Lululemon Athletica and Norwegian Cruise Line Holdings, negotiated the board changes out of the public eye.
It is not clear how big Elliott’s stake is.
The new directors underscore “our commitment to continued board refreshment and will further enable the board by bringing additional skills and experiences to accelerate our ongoing business momentum,” Mark Smucker, the company’s chief executive and board chairman said in a statement.
Elliott partner Marc Steinberg said the company is taking “critical steps toward ensuring (it) reaches its full potential” by adding the new directors and tackling capital allocation, operational and leadership issues.
Earlier in February, Smucker’s announced several leadership changes, including news that it eliminated the chief operating officer role.
(Reporting by Svea Herbst-Bayliss in Boston and Koyena Das in Bengaluru; Editing by Shreya Biswas and Nivedita Bhattacharjee)
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