Starboard Value Urges Lamb Weston to Double Cost Cuts
Starboard Value urged Lamb Weston to double its cost-reduction goal to 500 million dollars. The activist investor seeks to boost shares via operational gains.
Activist investor Starboard Value is urging Lamb Weston Holdings, Inc. to accelerate operational improvements and double its cost-cutting targets to bolster its share price. In a letter disclosed on Monday, the investment firm revealed it has acquired a stake in the major potato products manufacturer, stating that the company needs to be more aggressive in its pursuit of efficiency. Starboard Value has proposed that the company target approximately $500 million in total cost reductions, an objective significantly higher than the current savings program which aims for a minimum of $250 million in cuts by the end of 2028. The demand for increased savings comes as the company serves as a critical supplier for major fast-food brands, including McDonald's and Yum Brands. This latest push for change follows a previous settlement between the potato processor and Jana Partners, where the two parties agreed on board representation for the activist stakeholder to avoid a proxy contest. As of Monday, the company had not yet issued a formal statement regarding the new proposals.
