Blackwells Comments on Supervalu Board Continuing to Ignore Its Disastrous Record
July 18 2018 - 12:58PM
Business Wire
Claims To Be “Driving” and “Delivering”
Results, Impervious to the 92% Decline in Share Price
Continues Its Dishonest Attacks on
Blackwells
Shareholders Urged to VOTE the GREEN Proxy
Card
Blackwells Capital LLC (together with its affiliates,
“Blackwells Capital” or “Blackwells”), an alternative investment
management firm with over 8% ownership interest in Supervalu Inc.
(NYSE:SVU) (“Supervalu” or the “Company”), responded today to the
investor presentation filed yesterday by Supervalu. Blackwells has
nominated six highly qualified professionals for election to the
Supervalu Board of Directors at the Company’s upcoming annual
meeting. Information on the candidates nominated by Blackwells can
be found in the Blackwells proxy statement or at
www.savesupervalu.com.
Blackwells highlights that the Company claims to be
“aggressively transforming the business” and “delivering results,”
consistent with a prior pattern of puffery that the Company is
“rapidly and strategically transforming” and “making meaningful
progress,” all of which has “translated into measurable results”
and “demonstrated strong momentum.” Meanwhile, the stock has
declined more than 80% in the three years prior to Blackwells’
public statements, including more than 47% during the 12 months
prior to those statements.
“We are astounded that Supervalu believes it can advocate for
the re-election of its incumbent directors without so much as
attempting to address the tremendous losses shareholders have
suffered during the tenure of this Board,” said Jason Aintabi,
Managing Partner at Blackwells Capital.
Blackwells notes that none of Supervalu’s 59-page investor
presentation, two letters to shareholders or four press releases in
this proxy contest appear to contain even a
single reference to the Company’s stock price or shareholder
returns. In fact, Supervalu’s share price has dropped by at
least 63% under each of the current Board members’ tenure and by
92% over the past 10-years.1 The Company also fails to mention that
Supervalu’s earnings per share, gross margins, EBITDA and return on
invested capital have all steadily declined over the past four
fiscal years. The destruction of shareholder value under the watch
of, in Blackwells’ view, a conflicted and insular Board is
undeniable.
Current SVU Board
Members
Start
Date
Board
Tenure
SVU Absolute
Return During
Tenure (i)
Irwin Cohen May 2003 15 years
(86%) Philip Francis Feb 2006
12 years (92%) Donald Chappel
June 2010 8 years (82%)
Eric Johnson July 2013 5 years
(74%) Mathew Pendo April 2014
4 years (71%) Frank Savage
April 2014 4 years (71%)
Francesca Ruiz De Luzuriaga July 2015
3 Years (74%) Mary Winston
April 2016 2 Years (63%)
“Instead of recognizing their past failures and attempting to
persuade shareholders that the next five years will be different,
the directors are soliciting shareholder support as if all is well
and the current Board is perfectly capable of serving shareholder
interests. Where is the evidence of that? Platitudes about
‘transformations’ are cold comfort for a shareholder base that has
suffered billions in losses under the supervision of these same
directors.
“We believe the Board recognizes it cannot run an election
campaign on its own disastrous performance record and has instead
decided that making spurious and irrelevant statements about
Blackwells is the best approach to ensuring its continued tenure as
directors.
“Shareholders are smarter than this. The vote before
shareholders is to select the best independent directors to oversee
Supervalu and hold the incumbent directors accountable for the
astounding destruction of value that has occurred on their watch.
It isn’t about Blackwells. That the Board cannot even acknowledge
the economic harm they have caused – and worse, that they attempt
to deflect and redirect the attention of shareholders – is further
affirmation that the time has come to change Supervalu’s
leadership,” continued Mr. Aintabi.
Blackwells reiterates, as indicated in its proxy statement, that
it has invested tens of millions of dollars in Supervalu stock –
many multiples of the aggregate capital invested by the incumbent
directors, none of whom have purchased a single share of
Supervalu stock since 2015 – and that Blackwells owns more than
8% of the outstanding stock of Supervalu. The professionals
nominated by Blackwells (each of whom is otherwise independent of
Blackwells) will only become directors if they receive more votes
from shareholders than the incumbent directors. It is, thus,
utterly impossible for Blackwells to “seize” control of Supervalu.
Supervalu’s hysterical claims about Blackwells’ ownership stake and
intentions are simply dishonest.
Jason Aintabi concluded, “It is troubling that the Supervalu
Board has the effrontery to seek re-election while ignoring their
track record and significantly distorting our intentions. The
Supervalu shareholders with whom we have spoken have not forgotten
this Board’s many unfulfilled promises and record of abject value
destruction. It is unacceptable that the directors themselves seem
to have erased those memories. There is no more clear example of
failed leadership than what we see here. We welcome all
shareholders to join us in voting for change that we deserve, by
voting the GREEN proxy card.”
Supervalu shareholders are urged to bring
positive change to Supervalu and vote for truly independent and
experienced director nominees on the GREEN proxy card.
For any questions about how to vote, please contact Morrow
Sodali, at Blackwells@morrowsodali.com or (800) 662-5200.
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.
______________________
1 As of February 5, 2018 unaffected date, before Blackwells’ public
presentation, adjusted for dividends.
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version on businesswire.com: https://www.businesswire.com/news/home/20180718005700/en/
Investors:Morrow SodaliMike
Verrechia800-662-5200Blackwells@morrowsodali.comorMedia:Gagnier
CommunicationsDan Gagnier / Jeffrey Mathews646-569-5897
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