Four of activist hedge fund Starboard Value LP’s nominees to Newell Brands Inc’s board of directors withdrew their nominations, a day after the company gave billionaire investor Carl Icahn four board seats.
One of Icahn’s nominees, Patrick Campbell, was elected to serve as the new chairman of the Board. Those withdrawing their nominations include three former Newell Brands’ directors, Ian Ashken, Domenico De Sole and Martin Franklin, as well as James Lillie.
Starboard Value, which owns 4.5 percent of Newell Brands’ shares, said in a statement, “We continue to believe that Newell is substantially undervalued and that significant opportunities exist to create substantial shareholder value. As we have consistently stated, we believe that considerable change to the composition of Newell’s Board of Directors (the “Board”) and leadership is required. Since our involvement, eight of the 11 Board members will be new, including a new Chairman.
“We believe that asset sales, if executed properly, can create substantial value at Newell. Given that Newell intends to now explore asset sales for approximately half of the company, we believe that the most prudent course of action is for the company to work with its financial advisor to evaluate a comprehensive set of strategic alternatives for all of the businesses. Only following this thorough analysis can Newell prudently determine which assets may realize the greatest after-tax value, and decide which assets, if any, the company should continue to operate.
“In addition to asset sales, we are of the belief that there is an opportunity to significantly improve the operations at Newell. Based on our research, we are confident that there is an opportunity to improve operating income by approximately $500 to $800 million based on actions that should be within management’s control. We believe it is important that, in addition to exploring strategic alternatives for all of the businesses, the new Board be equally and simultaneously focused on the operational improvements available to the company. Asset sales on their own are not a panacea for operational issues.
“We intend to closely monitor the situation, and will be reserving our rights as to the election contest. Should we decide to move forward, we would reduce our slate to a minority of the Board. Given the new circumstances, and in consultation with Mariposa Associates, LLC, Ian Ashken, Domenico De Sole, Martin Franklin and James Lillie are collectively withdrawing their names from nomination, as they now plan to pursue other opportunities.”
Franklin stated “Newell announced yesterday that it was replacing its Chairman and the majority of the remaining Board. When Ian, Domenico and I resigned from the Board in January, we did so consistent with our belief that management and the Board were unwilling to recognize, and ill-equipped to deal with, the strategic and execution issues facing the company. We believe that our collective actions have moved the company substantially. However, we agree with Starboard that there are still many strategic and operational improvements which can be made and which are in management’s control. Given the circumstances, we plan to focus on other opportunities, but fully support Starboard in their deliberations.”
Jeffrey C. Smith of Starboard stated “We appreciate the support that we have received from shareholders. We look forward to continuing to engage with shareholders, as our goal is to represent the best interests of all Newell shareholders.”
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.
