Home / Business and Economy / Activist Eyes Fry Giant: Starboard Targets Lamb Weston
Activist Eyes Fry Giant: Starboard Targets Lamb Weston
9 Mar
Summary
- Starboard Value has built a sizable stake in french-fry maker Lamb Weston.
- The activist investor is pushing for faster improvements and cost cutting.
- Lamb Weston shares have declined more than 10% in the past 12 months.
Activist investor Starboard Value has amassed a substantial stake in Lamb Weston, a leading producer of frozen potato products. The firm is reportedly urging the company to hasten its improvement and cost-cutting initiatives to address its underperforming stock.
Lamb Weston, which counts McDonald's and Chick-fil-A among its customers, has experienced a challenging period, with its shares falling over 10% in the past 12 months. The company has been working to overhaul its operations following difficulties such as increased menu prices impacting demand and perceived rapid capacity expansion.
Starboard, while supportive of current management and previous efforts by activist Jana Partners, believes more urgency is required. The company appointed Mike Smith as its new CEO in January 2025. Lamb Weston has previously projected at least $250 million in annual cost savings, a target Starboard reportedly believes should be doubled.
To enhance its business, particularly in international markets, Starboard suggests Lamb Weston consider divesting its Asia Pacific operations. The activist investor sees Lamb Weston as a best-in-class company in a consolidated industry, capable of regaining market share.
