Sandell Recommences Hostilities With FirstGroup, Bob Evans

Jul 1 2014 | 7:24am ET

Activist hedge fund Sandell Asset Management has been quiet for a few months. But the New York-based firm is once again firing upon two of its targets, FirstGroup and Bob Evans Farms.

Sandell has called on FirstGroup to split its U.S. bus operations, including Greyhound Lines, from its British rail and bus operations, complaining that its current structure has led shares to seriously underperform peers. Given that unhappiness, it’s perhaps no surprise that the hedge fund thinks that CEO Tim O’Toole makes too much.

“We strongly believe that management’s and shareholders’ interests should be aligned and that properly structured rewards can incentivize management teams,” the hedge fund wrote. “We simply do not believe that a 94% rise in remuneration package is deserved for Mr. O’Toole’s 2013/14 performance.”

Sandell said it would vote against FirstGroup’s remuneration report at its annual meeting in two weeks. It also pushed the company to name its own nominees for an independent directorship on FirstGroup’s board to provide “sector expertise” on the U.S. The nominee was not identified.

Sandell’s hostilities with restaurant chain Bob Evans were also renewed when the company accused the hedge fund of refusing to compromise to avoid a proxy battle.

Bob Evans has conceded two seats on its board to Sandell nominees. But the hedge fund wants four of the 12 board seats and for Bob Evans to commit to its proposed changes.

Sandell shot back that “Bob Evans is doing nothing more than trying to appear as if they are willing to compromise, all while seeking to entrench themselves and maintain the status quo while failing to unlock value.”


In Depth

Steinbrugge: Top 10 Hedge Fund Industry Trends for 2017

Jan 3 2017 | 9:03pm ET

Each year, Agecroft Partners' Don Steinbrugge predicts the top hedge fund industry...

Lifestyle

'Tis the Season: Wall Street Holiday Parties Back In Fashion

Dec 22 2016 | 9:23pm ET

Spending on Wall Street holiday parties has largely returned to pre-2008 levels...

Guest Contributor

DarcMatter: The Top Trends in Alternative Investments for 2017

Jan 13 2017 | 8:22pm ET

The $7 trillion alternative investments industry is poised for continued growth...

 

From the current issue of

The U.S. Commodity Futures Trading Commission (CFTC) ordered The Goldman Sachs Group Inc., and Goldman, Sachs & Co. to pay a $120 million penalty for attempted manipulation and false reporting of ISDAFIX Benchmark Rates, a global benchmark for interest rate products.