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Settlement avoids bruising proxy fight

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Jana executive joins Lamb Weston ( LW ) board

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Board to grow to 13 members, up from 11

By Svea Herbst-Bayliss

NEW YORK, June 30 (Reuters) - Lamb Weston ( LW ) reached

a settlement with Jana Partners which gives the activist

investor a big presence on the french-fry maker's board and

averts a bruising board fight.

The agreement, announced on Monday, will add four of Jana's

proposed director candidates to the board and two other mutually

agreed-upon directors, expanding the board from 11 to 13

members.

The Jana candidates are Bradley Alford, a former Nestle USA

CEO who will become chairman; Timothy McLevish, a former Lamb

Weston executive chairman; food industry executive and

Continental Grain adviser Ruth Kimmelshue; and Jana's portfolio

manager Scott Ostfeld.

The two new mutually agreed on directors are Lawrence

Kurzius and Paul Maass, who both have food industry experience

as top executives.

The truce marks one of the biggest settlements in terms of

directors changing over this year and comes after Jana spent

more than seven months pushing management for operational and

capital improvement and possibly even a sale.

Lamb Weston ( LW ), based in Eagle, Idaho, with a market value of

roughly $7.6 billion, supplies frozen potato products, including

tater puffs and hash brown patties, to companies like McDonald's

and restaurant company Yum Brands ( YUM ).

The company's stock price has dropped more than 35% in the

last 12 months and slipped modestly to trade at $53.33 early on

Monday.

Lamb Weston ( LW ) CEO Mike Smith, who moved into the top job late

last year after a poor earnings announcement amid shrinking

demand for its products, welcomed the settlement. "We are

confident this outcome is in the best interests of the company

and all of our shareholders," he said.

Jana had been laying the path to a bruising board fight and

faced a deadline of Monday to nominate director candidates and

officially launch a fight. In a survey, commissioned by Jana,

roughly half of Lamb Weston's ( LW ) top 50 shareholders said they

wanted the entire board thrown out, giving Jana ammunition to

press its points.

The hedge fund, which owns roughly 7% of Lamb Weston ( LW ), teamed

up with Continental Grain, a privately held company that owns

and operates companies in food and agribusiness, on the

investment.

Jana has history with Lamb Weston ( LW ). A decade ago, it pushed

packaged food company Conagra Brands ( CAG ) to divest Lamb

Weston ( LW ), which had been a unit since it bought the french fry

maker in 1988. In 2016, Lamb Weston ( LW ) began trading as a public

company.

Jana previously called on Frontier Communications to sell

itself before Verizon Communications bought it. The firm also

pushed for a sale of New Relic, which was taken private by TPG

and Francisco Partners. And it pushed for a sale of Zendesk,

which was taken private in 2022 by investment firms led by

Hellman & Friedman and Permira.