Newell Brands announced that it entered into a cooperation agreement with Carl C. Icahn, chairman of Icahn Enterprises LP (IEP), who beneficially owns approximately 6.9 percent of the company’s outstanding shares.
Newell has been facing pressure from another activist shareholder, Starboard Value, which wants to replace Newell’s CEO and its entire board, arguing that Newell has underperformed since buying Jarden Corp in 2016.
As part of the agreement with Icahn, Newell Brands has agreed to appoint each of the following individuals designated by Icahn to the Newell Brands Board of Directors effective immediately: Patrick Campbell, Brett Icahn, Andrew Langham and Courtney Mather, with Campbell elected to serve as the new chairman of the Board. These designees will serve alongside James Craigie, Debra Crew, Michael Polk, Steven Strobel and Michael Todman on the Newell Brands Board of Directors. In addition, Judith Sprieser and another independent director nominee to be designated by Icahn, and approved by the Board, will be nominated to stand for election at the 2018 Annual Meeting. Pursuant to the Agreement, Icahn has agreed to vote all of his shares in favor of the Newell Brands nominees at the 2018 Annual Meeting of Stockholders.
In addition, Newell Brands also announced today that it has expanded its accelerated transformation plan, which remains focused on creating a company that is simpler, faster and stronger. The company believes there are further accretive divestiture opportunities that will bring the total yield of the accelerated transformation plan to approximately $10 billion of after-tax proceeds (although the company will only make divestitures at competitive market multiples). The company reiterated that it will continue to execute its strategic initiatives, including:
- Optimizing the portfolio to ensure focus on brands with attractive margins and growth potential in global categories.
- Driving operational efficiency and simplifying operations.
- Improving financial flexibility, increasing free cash flow productivity and returning capital to the shareholders.
- Capitalizing on Newell’s scale and differentiated capabilities to drive market share gains through innovation, eCommerce and international deployment.
- The agreement with Icahn provides that the company’s Finance Committee, which will be chaired by Courtney Mather, will oversee, in addition to its existing responsibilities, the divestitures contemplated by the company’s expanded accelerated transformation plan.
“We are pleased to have reached this agreement with the Newell Brands Board and I am confident that the entire company will benefit from the fresh perspectives of these new directors,” said Icahn. “IEP in the past has joined boards and greatly enhanced value for shareholders at numerous companies, including Tropicana, National Energy, Stratosphere Entertainment, Motorola, Herbalife, Hologic, eBay/PayPal, Forest Labs, Hain Celestial and Take-Two Interactive, to name only a few of the many. I believe we will be successful in helping to enhance value in the same way at Newell Brands. This company has a great stable of brands, and I believe a streamlined, consumer-facing portfolio will help the company focus on the most important businesses and reignite the performance in their core businesses. The company is significantly undervalued today, and I believe this new Board will help the management team generate significant value for shareholders, first through an expanded transformation plan and then through strengthened underlying performance. Michael Polk and the rest of the management team now have a solid strategy in place which we support and believe will result in strengthened performance over time.”
“We look forward to welcoming Patrick, Brett, Andrew and Courtney to the Newell Brands Board of Directors,” said Polk, chief executive officer of Newell Brands. “Their collective expertise will complement the Board’s already-significant experience and will serve us well as we continue to execute on our accelerated transformation plan. Our agreement with Carl Icahn reflects our shared understanding of the complexity of our business and our strategy to win in the rapidly changing retail landscape. On behalf of Newell Brands, I look forward to working with our Board of Directors to strengthen financial and operational performance and advance our shared goal of creating shareholder value.”
Polk added, “I want to extend our thanks and well-wishes to our directors who have agreed to step down in connection with the execution of this cooperation agreement. All have been steadfast and energetic supporters of the company, our business strategy and accelerated transformation plan. We are stronger for having had their leadership and counsel.”
Newell Brands brands include Paper Mate, Sharpie, Dymo, EXPO, Parker, Elmer’s, Coleman, Jostens, Marmot, Rawlings, Oster, Sunbeam, FoodSaver, Mr. Coffee, Rubbermaid Commercial Products, Graco, Baby Jogger, NUK, Calphalon, Rubbermaid, Contigo, First Alert, Waddington and Yankee Candle.
Newell’s Play segment overall includes Berkley, Shakespeare, Abu Garcia, Penn, Ugly Stik, Rawlings, Coleman, Contigo, Marmot, Aerobed, Camping and Sterns. The brands are all part of the Jarden Outdoor segment. Jarden Corp was acquired by Newell in 2016.
Photo courtesy Coleman