Blackwells Capital LLC (together with its affiliates,
“Blackwells Capital” or “Blackwells”), an alternative investment
management firm and one of the largest shareholders of Supervalu
Inc. (NYSE:SVU) (the “Company”) with an approximate 5.2% ownership
interest, today issued the following open letter to the Company’s
Board of Directors, in response to its continued refusals to engage
in good faith over proposals to reverse the continued destruction
of shareholder value.
The full text of the letter is below:
A LETTER TO THE SUPERVALU BOARD OF
DIRECTORS
May 17, 2018
To the Board of Directors of Supervalu Inc.,
We believe there is significant value in Supervalu’s assets,
people and business relationships. But, after years of continuous
value destruction, as a result of what in our view has been a
misguided and haphazard strategy overseen by this Board, we are
compelled to drive change that unlocks value for the benefit of all
of Supervalu’s shareholders.
Our repeated, good-faith attempts over the past eight months to
engage management and this Board about specific ways to reverse the
Company’s precipitous decline in value have been consistently and
systematically rejected, and this continues today. The Company has
reacted to our suggestions with what believe are ineffective half
measures. With the share price still trading near six-year lows
after the recent fourth quarter earnings, it is more evident than
ever that the markets have lost all confidence in Supervalu’s
current strategy, and in a Board that does not lead, but simply
reacts.
In order to unlock value for all shareholders, as we have
previously expressed, the Company must change fundamentally,
beginning at the Board level. In March, we privately notified you
that we intend to nominate six exceptionally talented, independent
candidates, who each bring desperately needed experience in retail
and wholesale grocery, logistics, sustainability and corporate
turnarounds, as well as fresh perspectives for your boardroom.
Rather than enter into a constructive discussion, however, this
Board preemptively publicized (only part of) our nomination notice,
mischaracterizing our intentions and our rights as a
shareholder.
Nevertheless, Blackwells has continued in its attempt to
constructively engage the Company, proposing reasonable changes to
strengthen this Board for the benefit of all Supervalu
shareholders. Again, rather than engage constructively or even sit
down directly with our nominees, this Board responded with an empty
gesture – over one month after we submitted director nominations –
to have two of our six nominees “screened” by your executive search
firm, presumably as part of a self-selecting board refresh.
Meanwhile, the Company has yet to give shareholders notice or
set a record date for the Supervalu annual meeting, which typically
occurs in mid-July. Why has this not happened yet? Does this Board
seriously intend to disenfranchise not just Blackwells but all of
the Company’s shareholders?
The current Board’s preference for entrenchment over direct
engagement is unacceptable, as many other shareholders will concur.
We believe shareholders recognize reactive half measures, or hollow
self-selected board “refreshes” the same way we do – as defensive
steps taken by a comfortably ensconced board, while the Company’s
value and options further erode.
Instead, we continue to strongly encourage you to engage with
your shareholders. Enter into constructive discussions about ways
to strengthen this Board. Take the time to meet with each of our
extraordinary board nominees. Fulfill your fundamental duties by
scheduling an annual meeting. Procrastination, delay tactics and
defensive half measures are elements that got us to where we are,
not to where we should be. Stop the value destruction for the
benefit of all shareholders.
If not, we are determined to provide every Supervalu shareholder
with the last say at the upcoming annual meeting. There they will
have what we believe is a clear choice: between the status quo,
with an entrenched Board that has proven itself unable to set a
winning strategy, or a slate of highly qualified, independent board
candidates who are prepared and committed to unlock value for all
shareholders.
Sincerely,/s/Jason AintabiManaging PartnerBlackwells Capital
LLC
About Blackwells Capital
Blackwells Capital is an alternative investment manager
dedicated to global fundamental and special situation investing
across capital structures. Founded in 2016 by Jason Aintabi, its
Managing Partner, Blackwells’ investment approach is
research-intensive, value-oriented and concentrated.
Blackwells Capital LLC ("Blackwells Capital"), together with the
other participants named herein (collectively, "Blackwells"),
intends to file a preliminary proxy statement and an accompanying
GREEN proxy card with the Securities and Exchange Commission
("SEC") to be used to solicit votes for the election of its slate
of director nominees at the 2018 annual meeting of stockholders of
Supervalu Inc., a Delaware corporation (the "Company").
BLACKWELLS STRONGLY ADVISES ALL STOCKHOLDERS OF THE COMPANY TO
READ THE PROXY STATEMENT AND OTHER PROXY MATERIALS AS THEY BECOME
AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. SUCH
PROXY MATERIALS WILL BE AVAILABLE AT NO CHARGE ON THE SEC'S WEB
SITE AT HTTP://WWW.SEC.GOV. IN ADDITION, THE PARTICIPANTS IN
THIS PROXY SOLICITATION WILL PROVIDE COPIES OF THE PROXY STATEMENT
AND GREEN PROXY CARD WITHOUT CHARGE, WHEN AVAILABLE, UPON REQUEST.
REQUESTS FOR COPIES SHOULD BE DIRECTED TO THE PARTICIPANTS' PROXY
SOLICITOR, MORROW SODALI, ATTN: MIKE VERRECHIA AT 800-662-5200 OR
VIA E-MAIL AT: BLACKWELLS@MORROWSODALI.COM.
The participants in the proxy solicitation are Blackwells
Capital, Jason Aintabi, Richard A. Anicetti, Steven H. Baer, R.
Chris Kreidler, Frank Lazaran, James J. Martell and Sandra E.
Taylor (collectively, the "Participants").
As of the close of business on May 16, 2018, Blackwells Capital
beneficially owns 1,605,865 shares of common stock, $0.01 par value
(the “Common Stock”) of the Company, including 666,300 shares
underlying currently exercisable call options. Mr. Aintabi, as the
managing partner of Blackwells Capital, may be deemed the
beneficial owner of the 1,605,865 shares of Common Stock
beneficially owned directly by Blackwells Capital. In addition, as
of the close of business on May 16, 2018, Mr. Aintabi beneficially
owns directly 383,405 shares of Common Stock, including 278,300
shares underlying currently exercisable call options. As of the
close of business on May 16, 2018, none of Messrs. Anicetti, Baer,
Kreidler, Lazaran, Martell or Ms. Taylor own any shares of Common
Stock.
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version on businesswire.com: https://www.businesswire.com/news/home/20180517005732/en/
Investors :Morrow SodaliMike Verrechia,
800-662-5200Blackwells@morrowsodali.comorMedia:Gagnier
CommunicationsDan Gagnier / Jeffrey Mathews / Patrick
Reynolds646-569-5897
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