Activist investor Jana Partners targets ConAgra after RalCorp acquisition

Activist investor Jana Partners which is targeting ConAgra Foods Inc, has threatened to nominate three directors following the the food company's disappointing acquisition of Ralcorp Holdings Inc.

Jana, a hedge fund founded by Barry Rosenstein disclosed a new active stake of about 7.2 per cent in ConAgra, and said in a regulatory filing yesterday that it asked the company to defer its 21 June deadline to submit nominations for its annual meeting to provide ''more time to have collaborative discussions.''

Responding to Jana's filing, ConAgra said in a statement that it had extended that deadline to 8 July.

ConAgra's $6.7-billion purchase of Ralcorp in 2013 ''has been followed by disappointing performance for stockholders, repeated guidance misses, negative revisions to long-term earnings targets, no dividend per share growth, and operating performance challenges,'' Jana said in the filing.

According to the hedge fund, it started building its stake after ConAgra wrote down the deal by $1.3 billion in March.

Jana has urged ConAgra to start a process to review strategy and corporate structure, examine its operational performance and costs, and better manage the way it allocated capital. ConAgra shares were up 7.4 per cent to $42 in after-hour trading.

''We welcome shareholder engagement,'' ConAgra said in the statement. ''We look forward to opening discussions with Jana Partners'' after ConAgra's fourth-quarter earnings release on 30 June.

Jana's 7.2-per cent stake makes it the second-largest shareholder in the Slim Jim Beef Jerky maker. According to Jana, the company's shares were undervalued.

ConAgra's shares, which hit a record high of $39.37 in regular trading yesterday were up, 6.4 per cent in extended trading.

Jana's three nominees include its founder Barry Rosenstein, former CEO of Nestle US Brad Alford and Diane Dietz, who oversaw supermarket chain Safeway Ltd's private-label business.