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New Activist Investor Pushes Pinnacle Foods to Explore Sale

New Activist Investor Pushes Pinnacle Foods to Explore Sale

Friday, April 20th, 2018

Last week, Jana Partners, the activist fund run by Barry Rosenstein that formerly had a stake in Whole Foods Market before it was bought by Amazon, disclosed a stake in Pinnacle Foods, leaving many analysts to believe the packaged food manufacturer is exploring a sale in the frozen food space, according to a Bloomberg report.

According to a regulatory filing, Jana Partners believes Pinnacle Foods is in a good position for consolidation, a reorganization of its cost structure, operations, and board composition, as well as a sale, due to its strong position in the frozen foods industry. Jana currently owns 9.5 percent of Pinnacle Foods.

“We are aware that Jana Partners has made a 13D filing regarding its investment in Pinnacle Foods,” a company spokesperson said in an email to Reuters. “Pinnacle’s Board of Directors and management team welcome stockholder input and are committed to continuing to create value for all stockholders.”

Brands owned by Pinnacle Foods

And, some believe Conagra Brands currently has the best skin in the game.

“We continue to believe that a Conagra Brands acquisition of Pinnacle Foods remains—along with Kraft Heinz buying Mondelez—among the most likely potential large-scale M&A events in U.S. foods,” David Palmer, a New York-based analyst with RBC Capital Markets, wrote in a note to clients on April 3. “We believe U.S. frozen is ripe for consolidation. Conagra’s management team therefore has an intimate knowledge of Pinnacle’s business given prior due diligence and planning.”

Following the breaking of this news on Friday, Pinnacle Foods shares rose 8.9 percent. Pinnacle currently has a market value of $6.6 billion.

Jana PartnersPinnacle Foods