While Pleased at the Successful Restoration of Rights to
Shareholders, Sandell Believes Further, Comprehensive Change is Necessary
Continues to See Need for Fundamental Strategic Change and to Reign
in Irresponsible Spending
NEW YORK--(BUSINESS WIRE)--
Sandell Asset Management Corp. ("Sandell"), one of the largest
shareholders of Bob Evans Farms, Inc. (NASDAQ:BOBE) ("Bob Evans" or the
"Company"), today commented on the Company's decision to reverse the
Bylaw changes made unilaterally by the Board of Directors (the "Board")
of Bob Evans in 2011 that severely restricted the rights of shareholders
to amend the Bylaws. As a result of this reversal, Sandell announced its
intention to withdraw its pending lawsuit against Bob Evans in the Court
of Chancery of the State of Delaware that had been filed in order to
restore the rights of shareholders to amend the Company's Bylaws (the
"Bylaws") by majority vote.
Thomas Sandell, CEO of Sandell Asset Management, stated, "We are
encouraged that the Board of Directors took steps to restore the rights
of shareholders to amend the Company's Bylaws by majority vote. It is
unfortunate that we had to go to court to preserve and enforce the
rights of shareholders and its clear to us the Company would not have
implemented these changes without us taking these measures. However, we
are pleased with this result and view it is as a victory for
shareholders against a company whose Board had taken entrenching actions
that we believe demonstrated complete contempt for the shareholders, who
are the true owners of Bob Evans."
Mr. Sandell further stated, "The other proposed changes that the Company
intends to present to shareholders at the 2014 Annual Meeting should
have been implemented a long time ago and in our opinion reflect a
cynical attempt to portray the Company as embracing good governance
practices. We are particularly skeptical about the Company's sudden
mention of "a search process for additional, independent directors" that
the Company states has been ongoing for 5 months, and take great issue
with the Company's idea of "independent" directors. While the Company's
2013 proxy statement claims that the Board is "comprised of nine
independent directors," we categorically reject this notion and believe
that the numerous connections both among Board members themselves, as
well as between various Board members and Chairman and CEO Steven Davis,
reflect one of the most insidious examples of cronyism demonstrated by a
publicly-traded company. For a more detailed illustration of the many
troubling relationships among Directors we refer to pages 5 through 8 of
the recent lawsuit filed on January 22, 2014 by the Oklahoma
Firefighters Pension & Retirement System against Bob Evans in the Court
of Chancery of the State of Delaware (Appendix A)."
Mr. Sandell also noted, "We remain convinced that further, comprehensive
strategic change is necessary at Bob Evans in order to unlock the
Company's true value for shareholders. In addition, we believe it is
imperative to reign in what we believe are the irresponsible spending
habits (the $46.5 million new corporate headquarters being a
particularly glaring example) and poor decisions made by management and
sanctioned by this Board. Indeed, we have profound concerns regarding
the Company's cost structure and mis-management of the Company's core
restaurant brand. It is our belief that there may be over $30 million in
excess general and administrative expenses at the Company, which,
coupled with the Company's significant real estate value, is a factor
that we believe has resulted in recent private equity interest
articulated to us. We do not believe that this Board of Directors has
demonstrated any ability to effectively extract value from the Company's
unique assets or oversee the management of Bob Evans. Fortunately, the
shareholders now have had their rights to additional avenues to
effectuate change restored."
Appendix A: Selection from Verified Class Action Complaint filed
January 22, 2014 by the Oklahoma Firefighters Pension & Retirement
System against Bob Evans in the Court of Chancery of the State of
"10. Defendant Bob Evans' Board is parochial in the extreme for a public
company. In 2010, The Corporate Library raised concerns that Defendant
Bob Evans had a "board within a board" and a problem due to "potential
director and managerial entrenchment." This is in part due to the fact
that a majority of the Board's members have long-standing relationships
with each other and with the Company's Chairman and CEO, Defendant
Steven A. Davis, whether through local Columbus, Ohio institutions (such
as Ohio State University) or through their residence in or adjacent to
New Albany, Ohio (an exclusive master-planned community northeast of
Columbus with a population of approximately 7,700). In fact, the Board
recently built a new corporate headquarters in New Albany, Ohio at a
cost of approximately $46.5 million, instead of accepting more than $14
million in incentive payments to stay at its prior location in the City
11. Defendant Steven A. Davis ("Davis") has served as Chairman and CEO
of Bob Evans since 2006. Defendant Davis is a resident of New Albany,
Ohio. Since at least 2007, Defendant Davis has been a member of the
board of the Foundation for the Ohio State University Comprehensive
Cancer Center—Arthur G. James Cancer Hospital and Richard J. Solove
Research Institute (the "OSU James Foundation"). Defendant Davis
delivered the 2008 Winter commencement speech at Ohio State University.
He has also been a member of the JobsOhio Board of Directors since July
2011. Defendant Davis's wife, Lynnda Davis, is a member of the Board of
Trustees of the Columbus College of Art & Design and a founding member
of the Women's Leadership Council of the United Way of Central Ohio. At
least one of Defendant Davis's children attended Columbus Academy, a
private college preparatory school. Several of Defendant Davis's
colleagues on the Board share the affiliations of the Davis family.
12. Defendant Michael J. Gasser ("Gasser") has served as a Bob Evans'
director since 1997 and as its purported "Lead Independent Director"
since 2006. Defendant Gasser was a member of the board of the OSU James
Foundation from at least 2011 to 2012. Defendant Gasser has been a
member of the Ohio State University Board of Trustees since September
2012. According to his fellow Bob Evans' director and then-Ohio State
University President, E. Gordon Gee, Defendant Gasser was "the driving
force" behind a $5 million grant to Ohio State University and the Global
Health Delivery Partnership from a charitable trust that was affiliated
13. Defendant E. Gordon Gee ("Gee") has served as a Bob Evans' director
since 2009. Defendant Gee was the President of Ohio State University
from 2007 to 2013. He remains closely connected with Ohio State
University, retaining tenure at its law school and the title "President
Emeritus." Like Defendant Davis, Defendant Gee has been a member of the
JobsOhio Board of Directors since July 2011.
14. Defendant E.W. Ingram III ("Ingram") has served as a Bob Evans'
director since 1998. Defendant Ingram is a resident of New Albany, Ohio.
Defendant Ingram was a member of the board of the OSU James Foundation
from at least 2007 to 2011. Defendant Ingram has also been a member of
the board of the Ohio State University Foundation since at least 2007.
In January 2011, Defendant Ingram pledged $10 million to Ohio State
University and Nationwide Children's Hospital for autism research. In
December 2011, Defendant Ingram and his wife received the Distinguished
Service Award at the Ohio State University Autumn 2011 commencement.
15. Defendant Cheryl Krueger ("Krueger") has served as a Bob Evans'
director since 1993. Defendant Krueger is a resident of New Albany,
Ohio. She is also a former president of the OSU James Foundation,
chaired its capital raising campaign, was a member of the OSU James
Foundation board from at least 2006 to 2012, and made a $1 million
pledge to the OSU James Foundation. Defendant Krueger was a member of
the board of the Ohio State University Foundation from at least 2007 to
2012. Krueger was also personally invited by then-Ohio State University
President, Defendant Gee, to give the commencement speech at the
University's Autumn 2011 commencement. Defendant Krueger has been a
member of the Ohio State University Board of Trustees since June 2012.
She was also an eight-year member and former president of the Board of
Trustees of Columbus Academy, chaired its capital campaign, and is the
donor for a Columbus Academy endowed fund in her name.
16. Defendant G. Robert Lucas ("Lucas") has served as a Bob Evans'
director since 1986. Defendant Lucas is a resident of New Albany, Ohio.
He is a former partner of Vorys, Sater, Seymour and Pease ("Vorys
Sater"), Bob Evans' long-time outside legal counsel, based in Columbus,
Ohio. In 2007, Defendant Lucas made a donation to the Ohio State
University Foundation to establish the Lucas Family Scholarship Fund at
Ohio State University's law school.
17. Defendant Eileen Mallesch ("Mallesch") has served as a Bob Evans'
director since 2008. Defendant Mallesch lives in Gahanna, Ohio, which
abuts New Albany, Ohio. Defendant Mallesch is a member of the Board of
Trustees of the Columbus College of Art & Design and a founding member
of the Women's Leadership Council of the United Way of Central Ohio.
18. Defendant Paul S. Williams ("Williams") has served as a Bob Evans'
director since 2007. Defendant Williams is a former partner of Vorys
Sater. Defendant Williams was the President of the Board of Trustees of
Columbus Academy during the same period when Defendant Krueger served as
capital campaign chair, and he is the donor for a Columbus Academy
endowed fund in his family's name.
19. Defendant Larry C. Corbin ("Corbin") has served as a Bob Evans'
director since 1981. He started his career at Bob Evans in 1962 and
retired in 2006 after serving as Interim Chief Executive Officer from
2005 to 2006.
20. Defendant Bryan G. Stockton ("Stockton") served as a Bob Evans
director between 2006 and 2012.
21. Defendants Davis, Gasser, Gee, Ingram, Krueger, Lucas, Mallesch,
Williams, Corbin, and Stockton are referred to herein as the "Director
About Sandell Asset Management Corp.
Sandell Asset Management Corp. is a leading private, alternative asset
management firm specializing in global corporate event-driven,
multi-strategy investing with a strong focus on equity special
situations and credit opportunities. Sandell Asset Management Corp. was
founded in 1998 by Thomas E. Sandell and has offices in New York and
London, including a global staff of investment professionals, traders
and infrastructure specialists.
SANDELL ASSET MANAGEMENT CORP., CASTLERIGG MASTER INVESTMENTS LTD.,
CASTLERIGG INTERNATIONAL LIMITED, CASTLERIGG INTERNATIONAL HOLDINGS
LIMITED, CASTLERIGG OFFSHORE HOLDINGS, LTD., CASTLERIGG MERGER ARBITRAGE
AND EQUITY EVENT FUND, LTD., CASTLERIGG MERGER ARBITRAGE AND EQUITY
EVENT INTERMEDIATE FUND, L.P., CASTLERIGG MERGER ARBITRAGE AND EQUITY
EVENT MASTER FUND, LTD., CASTLERIGG GLOBAL EQUITY SPECIAL EVENT FUND,
LTD., CASTLERIGG GLOBAL EQUITY SPECIAL EVENT INTERMEDIATE FUND, L.P.,
CASTLERIGG GLOBAL EQUITY SPECIAL EVENT MASTER FUND, LTD., CASTLERIGG
UCITS FUNDS PLC, SANDELL INVESTMENT SERVICES, L.L.C., PULTENEY STREET
PARTNERS, L.P., AND THOMAS E. SANDELL (COLLECTIVELY, "SANDELL" OR THE
"PARTICIPANTS") MAY FILE WITH THE SECURITIES AND EXCHANGE COMMISSION
(THE "SEC") A DEFINITIVE CONSENT STATEMENT AND ACCOMPANYING FORM OF
CONSENT TO BE USED TO SOLICIT WRITTEN CONSENTS FROM THE STOCKHOLDERS OF
BOB EVANS FARMS, INC. (THE "COMPANY") IN CONNECTION WITH SANDELL'S
INTENT TO SEEK TO HAVE THE COMPANY'S STOCKHOLDERS TAKE CORPORATE ACTION
BY WRITTEN CONSENT (THE "CONSENT SOLICITATION"). ALL STOCKHOLDERS OF THE
COMPANY ARE ADVISED TO READ THE DEFINITIVE CONSENT STATEMENT AND OTHER
DOCUMENTS RELATED TO THE SOLICITATION OF WRITTEN CONSENTS BY SANDELL
FROM THE STOCKHOLDERS OF THE COMPANY, IF AND WHEN THEY BECOME AVAILABLE,
BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION, INCLUDING ADDITIONAL
INFORMATION RELATED TO THE PARTICIPANTS. IF AND WHEN COMPLETED, THE
DEFINITIVE CONSENT STATEMENT AND AN ACCOMPANYING CONSENT CARD WILL BE
FURNISHED TO SOME OR ALL OF THE COMPANY'S STOCKHOLDERS AND WILL BE,
ALONG WITH OTHER RELEVANT DOCUMENTS, AVAILABLE AT NO CHARGE ON THE SEC'S
WEBSITE AT HTTP://WWW.SEC.GOV/.
IN ADDITION, MACKENZIE PARTNERS, INC., SANDELL'S PROXY SOLICITOR, WILL
PROVIDE COPIES OF THE DEFINITIVE CONSENT STATEMENT AND ACCOMPANYING
CONSENT CARD, IF AND WHEN AVAILABLE, WITHOUT CHARGE UPON REQUEST.
INFORMATION ABOUT THE PARTICIPANTS AND A DESCRIPTION OF THEIR DIRECT OR
INDIRECT INTERESTS BY SECURITY HOLDINGS IS CONTAINED IN EXHIBIT 3 TO THE
SCHEDULE 14A FILED BY SANDELL ASSET MANAGEMENT CORP. WITH THE SEC ON
DECEMBER 9, 2013. THIS DOCUMENT CAN BE OBTAINED FREE OF CHARGE FROM THE
SOURCES INDICATED ABOVE.
Cautionary Statement Regarding Opinions and Forward-Looking Statements
Certain information contained herein constitutes "forward-looking
statements" with respect to Bob Evans Farms, Inc. ("Bob Evans"), which
can be identified by the use of forward-looking terminology such as
"may," "will," "seek," "should," "could," "expect," "anticipate,"
"project," "estimate," "intend," "continue" or "believe" or the
negatives thereof or other variations thereon or comparable terminology.
Such statements are not guarantees of future performance or activities.
Due to various risks, uncertainties and assumptions, actual events or
results or actual performance may differ materially from those reflected
or contemplated in such forward-looking statements. The opinions of
Sandell Asset Management Corp. ("SAMC") are for general informational
purposes only and do not have regard to the specific investment
objective, financial situation, suitability or particular need of any
specific person, and should not be taken as advice on the merits of any
investment decision. This material does not recommend the purchase or
sale of any security. SAMC reserves the right to change any of its
opinions expressed herein at any time as it deems appropriate. SAMC
disclaims any obligation to update the information contained herein.
SAMC and/or one or more of the investment funds it manages may purchase
additional Bob Evans shares or sell all or a portion of their shares or
trade in securities relating to such shares.
Source: Sandell Asset Management Corp.