Sandell files lawsuit against Bob Evans
NEW YORK (AP) — A Bob Evans Farms' shareholder has filed a lawsuit against the restaurant chain over changes to its bylaws.
Sandell Asset Management Corp., which holds 6.5 percent of the company's shares, said Tuesday that it has filed a complaint over what it characterizes as the board's decision to strip shareholders of their rights to amend the company's bylaws. The asset management firm says the board's move, made by majority vote, was invalid.
Columbus, Ohio-based Bob Evans said in a statement that it is reviewing the complaint.
"We take corporate governance and shareholder views seriously and will respond in due course," Bob Evans' statement said.
Sandell has been pushing for changes at Bob Evans for some time, suggesting in September that the company sell or spin off its food products business, among other changes. The investor feels Bob Evans is undervalued.
Bob Evans said in December that it has reviewed Sandell's proposals and decided they were not in the best interests of the company.
Thomas Sandell, CEO of Sandell Asset Management, said in a statement Tuesday that it is "outrageous" that the board adopted, without shareholder approval, a requirement that an 80 percent supermajority shareholder vote be obtained in order for shareholders to amend the bylaws.
"We believe that the Board's unilateral action to strip shareholders of their rights demonstrates this board's complete contempt for its shareholders," Sandell said.
Sandell said if the lawsuit is resolved in his firm's favor, it intends to ask shareholders to expand the size of the company's 10-member board and vacancies with new directors who are "more focused on delivering value to the shareholders".
The complaint was filed in the Court of Chancery in Delaware.
Shares of Bob Evans increased 38 cents to $48 by midday, in line with broader market trends.