Retailers

Blackwells IDs Proposed Supervalu Board Nominations as Proxy Fight Mounts

Former retail execs Anicetti, Lazaran among Blackwells’ six proposed SVU board members
Supervalu

In conjunction with Blackwells Capital’s ongoing proxy fight to gain control of Supervalu Inc., the activist investor has revealed the names of the six candidates it will nominate for director seats on the Minneapolis-based wholesale distributor’s nine-person board, including:

  • Richard A. Anicetti, a 38-year veteran of the retail food industry who has spent nearly a third of his career serving as CEO of The Fresh Market and Food Lion.
  • Frank Lazaran, former chairman, CEO and president of the now defunct Marsh Supermarkets, and former CEO and president of Winn-Dixie.
  • Robert “Chris” Kreidler, former CFO and EVP of Sysco Corp. and previously EVP, CFO and chief customer officer of C&S Wholesale Grocers Inc.
  • Steven H. Baer, partner of High Ridge Partners, a private turnaround, restructuring and financial consulting firm and earlier, president and CEO of Koenig & Strey Financial Services.
  • James J. Martell, a public company director with experience in logistics and transportation, including as a director of Mobile Mini Inc. and board chairman XPO Logistics Inc.
  • Sandra E. Taylor, founder, president and CEO of Sustainable Business International LLC and formerly SVP of corporate social responsibility for Starbucks Corp. and VP and director of public affairs for Eastman Kodak Co.

The alternative investment management firm, which has approximately 5% ownership interest in Supervalu, originally planned to nominate three director candidates for Supervalu’s board last month. But as WGB previously reported, Blackwells has since proposed to replace six of the nine board members at the wholesaler’s 2018 annual shareholders meeting.

Over the past six months, Blackwells said it has “communicated shareholders’ frustration with the company’s results and the need for real change in its approach to operations, strategy and governance in order to turn around the company’s pronounced underperformance and unlock shareholder value."

“Supervalu’s board has overseen the worst performance in its peer group over the past three, five and ten years,” Jason Aintabi, managing partner at Blackwells Capital, said in a statement announcing the proposed six board nominees. “Only when facing pressure from shareholders has the company displayed any sense of urgency and its actions have been underwhelming to say the least. The current directors have almost no economic alignment with shareholders and little experience relevant to Supervalu or its challenges. Indeed, while the company highlights a portion of our ownership as being out of the money options, it fails to acknowledge that these options were in the money until the actions of the management team and board so deleteriously affected the share price. The only result that the incumbents have delivered is an increasingly disastrous record of value destruction."

The specific directives Blackwells’ is seeking to create greater value for Supervalu shareholders includes:

  • Multiple strategic initiatives to drive growth and margins, and reduce Supervalu’s significant valuation discount.
  • A sale-leaseback of Supervalu’s wholesale distribution center real estate to reduce net leverage and significantly boost share price.
  • A sale or spinoff of the retail segment, transforming Supervalu into a pure-play wholesale business, which would be accretive to EPS and improve valuation multiples.
  • A sale or merger of Supervalu’s wholesale business to or with one of multiple potential competitors.

“We continue to believe substantial value exists in Supervalu’s assets, people and business relationships. But, the time has long passed for incrementalism,” Aintabi’s statement continued. In order “to unlock value for shareholders,” Supervalu must “change fundamentally, and change must begin at the board level. We believe a different, and more cohesive and experienced, group of directors are needed to effectuate real change at Supervalu.

“For the benefit of all shareholders, we have nominated an extraordinarily talented slate of directors to the Supervalu board,” said Aintabi, which includes “independent leaders in the retail and wholesale food industry, as well as in logistics and sustainability. Although Blackwells has conducted extensive diligence on each of them, Blackwells has no prior relationship with these professionals. The nominees will work for all shareholders, bringing decades of relevant experience, which the board desperately needs. Most importantly, these nominees are committed to review and reset Supervalu’s failing strategy.”

Details about Supervalu's response to Blackwells' six proposed board members can be found here.

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