The New York-based investor, which acquired a stake of around 7.5%, also appointed three directors to the board, according to a regulatory filing confirmed Wednesday by a Bloomberg News report.
TreeHouse’s 23% gain was the stock’s biggest jump since 2005, according to data compiled by Bloomberg. Its shares closed up 19% at $ 50.69 in New York on Wednesday, giving the company a market value of $ 2.9 billion.
The company said in a statement that it would consider Jana’s candidates for the board. TreeHouse said he had had multiple discussions with Jana, and said the investor supported the steps he had taken to drive growth and profitability. He said he was open to a constructive dialogue with his shareholders and planned to provide an update on his progress during his earnings call scheduled for Thursday.
A representative for Jana declined to comment.
TreeHouse shares have underperformed the broader S&P 500 index in recent years. Shares of the company fell 8.7% in the past year to Tuesday’s close, while the S&P 500 gained about 17% over the same period, according to data compiled by Bloomberg.
TreeHouse was ranked second among the Russell 3000 companies most likely to attract activist investor interest, based on Bloomberg’s Activism Selection Model, which takes into account such things as its returns.
The company has also become a target for short sellers and could be a potential candidate for short squeeze following the events of GameStop Corp. and other companies with similar profiles to TreeHouse in recent weeks, according to Steven DeSanctis. , an analyst at Jefferies Financial Group Inc.
“Robinhood and retail investors have targeted names of smaller-cap companies that tend to be cash-strapped,” he said in a note to clients on Jan. 28.
Jana, which was founded by Barry Rosenstein, has a long history of pushing for consolidation in the consumer space, including waving at Whole Foods Market Inc. before it was sold to Amazon.com Inc. in 2017. He also pushed for the sale of Pinnacle Foods Inc., PetSmart Inc. and Safeway Inc. prior to their sale.
Private label companies, like TreeHouse, make food and drink for grocery stores to sell under their own brands. TreeHouse’s products range from cookies and crackers to frozen waffles and coffee, according to its website.
There has been some private equity interest in the industry in recent years. Post Holdings Inc. announced in 2018 that it had formed a new private label subsidiary, 8th Avenue Food & Provisions, and transferred its existing assets to the new company. It sold nearly 40% of the new entity to private equity firm Thomas H. Lee Partners.
Jana’s nominees for TreeHouse’s board are Meredith Adler, John Paul Gainor Jr. and Charles Myers, the filing says.
The company is expected to release its results on Thursday.