Freshpet's Largest Shareholder, Jana Partners, Pushes for Strategic Overhaul

  • Jana Partners plans to launch a proxy battle with Freshpet Inc FRPT and nominate four directors.
  • Jana is the largest shareholder in the pet food company, with an approximate stake of 9.3%.
  • At its peak, Freshpet had a market value of around $8 billion, now around $3.2 billion. 
  • Jana says in the letter that more than half of Freshpet’s independent directors “pursued outside interests with corporate resources and key members of management.” 
  • In September, The Wall Street Journal reported that Jana had amassed a sizable stake in Freshpet and planned to push it to make changes to boost its stock price and explore a sale. 
  • Jana now argues that the board has “disregarded its most basic duties to shareholders,” according to the letter, first reported by the Wall Street Journal. 
  • A spokesperson for Freshpet said the company has engaged with Jana “extensively” over the past nine months to address the firm’s concerns. 
  • “Unfortunately, Jana has made clear to us that their sole purpose is to force a sale of the company without consideration to all potential paths to value creation,” the spokesperson said. “
  • Earlier this month, Freshpet reported first-quarter FY23 sales growth of 26.7% year-on-year to $167.52 million, beating the consensus of $166.90 million.
  • Freshpet sees FY23 sales of about $750 million (consensus $752.3 million), representing an increase of ~26% from 2022.
  • Price Action: FRPT shares closed at $66.20 on Wednesday.
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