A potential takeover of Supervalu’s board of directors is set for Aug. 16, when shareholders will vote for new board members at Supervalu’s annual meeting.
Activist investor Blackwells Capital has been campaigning for changes at Supervalu since October. It has submitted six candidates for the nine-seat Supervalu board of directors. Three of the candidates have retail grocery or food distribution leadership experience.
Supervalu asserts that it has been taking steps to turn the business around, including the December 2016 sale of Save-A-Lot, the rapid growth of the wholesale segment of the company, the divestiture of retail operations, and the sale and leaseback of distribution centers to free up capital for new initiatives like online grocery.
Supervalu also contended in a letter to shareholders July 9 that Blackwells Capital has overstated its stake in the company.
“Any claim Blackwells could make to act on behalf of Supervalu’s stockholders is belied by the fact that, through short sales of call options and the purchase of put options, Blackwells’ exposure to the company is substantially less than it represents,” Supervalu chairman Donald Chappel and president and CEO Mark Gross wrote the letter. “In fact, while Blackwells claims that it has a 7.7% ownership interest in Supervalu, analysis of the detailed information it has provided in its filings shows that, taking into account its various options contracts, Blackwells’ exposure to the Company’s shares is materially lower than 7.7%.”
Supervalu states that Blackwells Capital owns 5.3% of the company outright. Blackwells Capital disputes that characterization and will be voting at 7.7%, spokesman Jeffrey Mathews told The Packer.
The company has urged shareholders to vote for all nine current board members and cautioned against voting for Blackwells Capital candidates.
“We believe that there is significant risk to the important progress the company is making in executing its ongoing strategic plan by supporting Blackwells and its proposal to replace the majority of your board,” Chappel and Gross wrote.
Blackwells Capital, which has listed a sale of Supervalu as one of the avenues it wants to explore, urged the opposite approach in a July 2 letter to shareholders.
Managing partner Jason Aintabi took credit for the resurgence of the Supervalu stock price and disparaged the current leadership.
“In February 2018, we released a detailed strategic plan for the company,” Aintabi wrote in the letter. “While the mere prospect of our value-creating plan being implemented has led the stock to rally by more than 40%, we do not believe it is wise to entrust the future of Supervalu to the same individuals who have failed for so long to create long-term shareholder value. This board has, in our view, repeatedly shown that they lack any measure of agility, expertise or independence.”