Activists Macellum, Ancora Pursue Board Fight at SpartanNash

(Bloomberg) -- Activist investors Macellum Advisors and Ancora Holdings Group are nominating three directors to the board of Amazon.com Inc.-linked food distributer SpartanNash Co. and pushing for changes including a potential sale.

SpartanNash responded that the activists appear to be focused on a proxy contest rather than the company’s turnaround success.

Together, Macellum and Ancora own about 4.5% of the company’s stock, they said in a letter to SpartanNash shareholders that reviewed by Bloomberg News. The investors had teamed up previously on campaigns at Bed Bath & Beyond Inc. and Kohl’s Corp.

The pair are also looking to replace SpartanNash Chairman Douglas Hacker and ensure the board is considering strategic alternatives. They’ve nominated Jonathan Duskin, chief executive officer of New York-based Macellum, John Fleming, a former Walmart Inc. executive and director at Bed Bath & Beyond, and Michael Lewis, a former OfficeMax and Walmart executive. 

“We believe there is at least one financial buyer and multiple real estate firms that have been interested in pursuing transactions with SpartanNash over the past two years,” the investors said. Buyers could pay a “meaningful premium for the whole company, its owned real estate or its assets,” they added.

Share Gain

SpartanNash shares rose 12% to $34.82 at 2:16 p.m. Friday in New York trading, giving the company a market value of $1.25 billion.

The company, which said in February that it appointed three new independent directors, responded in a statement that its turnaround plan has already delivered a 251% return to shareholders since the summer of 2019. That includes an 88% total shareholder return since a new management team was announced in September 2020, according to the statement. The turnaround has included cutting long-term debt while increasing earnings, it said.

SpartanNash said it first met with Macellum in November but, other than proposing a five-member board slate, the investors didn’t offer any specific views on the business until March 1, and by then those ideas were outdated. The company said it was unaware that Ancora was a shareholder until Friday’s letter. 

“It seems that the investor group’s priority is a proxy contest, not constructive engagement with SpartanNash about ideas that would benefit all shareholders,” the company said.

Amazon connection

Based in Grand Rapids, Michigan, SpartanNash delivers groceries for Amazon.com Inc.’s Amazon Fresh, and also operates commissaries for the U.S. military. It owns 134 supermarkets, mostly under the names Family Fare, Martin’s Super Markets and D&W Fresh Market, according to its website.

SpartanNash has worked with Amazon Fresh since 2016 and said in October 2020 that it would sell a chunk of its stock at potentially lower-than-market prices to Amazon if Amazon purchased $8 billion worth of food over seven years.

Macellum and Ancora said in the letter that the Amazon deal dilutes shareholders and hasn’t led to an earnings increase for SpartanNash.

The investors said that SpartanNash had underpeformed its peers from an operational and shareholder return perspective. It’s also sitting on $1 billion of real estate that is on its balance sheet, according to the investors. 

“We contend the board has consistently demonstrated disappointing decision-making and poor judgment while presiding over many initiatives that have resulted in the destruction of shareholder capital,” Macellum and Ancora said. 

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