Newell Brands in Proxy Fight With Activist Investor Starboard Value

Companies and Brands

Published: February 9, 2018 8:00 am

Last Updated: January 12, 2020 3:34 am

Consumer products maker Newell Brands Inc. (NYSE: NWL) announced Friday morning that the company has been notified by activist investor firm Starboard Value and Opportunity Master Fund will challenge the company’s nominees for 10 seats on the Newell board of directors at the company’s annual shareholders’ meeting.

Newell’s stable of consumer brand names includes Rubbermaid, Sunbeam, Mr. Coffee, Sharpie, Rawlings and Coleman.

On January 25, Newell announced that it would speed up a transition plan that the company said would improve operational performance and enhance shareholder value. Shareholders rushed for the exits and the stock dropped 20% to a multiyear low. CEO Michael Polk made our list of the worst CEOs of 2017.

Starboard has teamed up with three former executives of Jarden, a consumer products company Newell acquired in 2016 for $15 billion. The pairing owns just under 5% of Newell’s outstanding shares.

In response to Starboard’s letter notifying management of the proxy battle, Newell said:

Newell Brands has a diverse, experienced Board that is committed to acting in the best interests of the company and all shareholders. Newell’s Board comprises nine highly qualified and experienced directors, eight of whom are independent and all of whom are seasoned leaders. The entire Newell Board is actively engaged and has a broad range of valuable perspectives. They bring experience in global leadership, supply chain management, finance, marketing, global brand management, product development, internet and mobile media business, consumer, retail and industrial markets, manufacturing and other areas critical to Newell Brands’ business.

Newell’s transition plan includes hiving off some nonperforming brands and targeting annual net sales of around $11 billion. In 2016 the company’s net sales totaled $13.26 billion and analysts are looking for sales of $14.7 billion when the company reports results next Friday.

Shares traded up more than 4% in Friday’s premarket to $29.07, after closing at $27.91 on Thursday. The stock’s 52-week trading range is $23.85 to $55.08, and the 12-month consensus price target is $29.57. No date has been announced for the annual meeting.