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Starboard Is Said to Launch Fight at Rubbermaid Maker Newell

Starboard Is Said to Launch Fight at Rubbermaid Maker Newell

(Bloomberg) -- Starboard Value, the activist fund run by Jeff Smith, plans to launch a proxy fight to replace the entire board of Newell Brands Inc. and replace Chief Executive Officer Michael Polk, according to people familiar with the matter.

The New York-based hedge fund is partnering with former executives of Jarden Corp., which was bought by Newell two years ago, said the people, who asked not to be identified because the matter is private. Newell’s brands include Rubbermaid, Crock-Pot and Mr. Coffee, among other consumer products.

If successful, Starboard and its partners are expected to push for Jim Lillie, the former CEO of Jarden, to replace Polk as Newell’s CEO and install ex-Jarden Chairman Martin Franklin as chairman of the company, the people said.

Newell confirmed Friday it received notice that Starboard and its partners plan to nominate 10 directors for its board. It said the company already has a diverse, experienced board that is committed to acting in the best interest of Newell and its investors.

“The Newell board and management team continue to take decisive action to deliver strong financial and operational performance,” the company said in a statement.

Board Exits

Starboard and its partners, which together own slightly less than 5 percent of Newell, are concerned about how Newell and Jarden have been integrated under Polk, the people said. 

In January, Franklin and former Jarden Vice Chairman G.H. Ashken, along with Domenico De Sole, resigned from Newell’s board. The move was due to their objections to the direction the company was taking, the people said.

Newell’s shares have fallen about 40 percent in the past year through Thursday’s close. Starboard and its partners believe the decline is largely due to execution issues, and under the leadership of Franklin, Lillie and Ashken, Newell would be able to achieve the growth Jarden had achieved prior to being acquired, the people said.

Under Franklin and his executive team, Jarden’s stock rose to about $59 a share when the company was sold in 2016 from less than $5 in 2002, according to data compiled by Bloomberg.

Buying Spree

Shares in Newell fell 3.2 percent as of 11:12 a.m. Friday in New York.

Last month, the company, based in Hoboken, New Jersey, said it planned to retreat from Polk’s debt-fueled acquisition spree and to sell off several brands that account for about half of its customer base. Some of the properties, including Rubbermaid, were considered key to the company’s future just a few years ago.

Newell said Friday its transformation plan remains on track after the merger, noting that it has increased market share and core sales growth, cut costs by more than $550 million and reduced debt by $3.4 billion since 2016. It continues to focus its portfolio on nine core divisions and is committed to an extra $700 million in cost savings through 2021. Newell is exploring options for some of its brands, including food packaging maker Waddington and protective glove manufacturer Mapa.

The Wall Street Journal reported Starboard’s plans earlier, citing people familiar with the matter.

To contact the reporter on this story: Scott Deveau in New York at sdeveau2@bloomberg.net.

To contact the editors responsible for this story: Elizabeth Fournier at efournier5@bloomberg.net, Michael Hytha, Timothy Sifert

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