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Attention all shoppers, activist investor in aisle 4.
Shares in Whole Foods Markets jumped nearly 11 per cent on Monday after activist hedge fund Jana Partners revealed that it has taken a 9 per cent stake in the upscale supermarket chain and demanded the retailer take steps to improve its share price, including exploring a sale of the company.
The stake, announced in a regulatory filing, also contains the news that Jana has not come alone to this fight. It has assembled a group of executives that could be parachuted in to turn things around if Whole Foods’ existing board does not agree to its demands.
The demands are seven-fold:
- Address chronic underperformance for shareholders
- Install new directors and senior management and improve governance
- Optimise real estate and capital allocation
- Fix its myriad operational problems
- Shake-up store management practices
- Improve supply chain
- Launch a strategic review, “in light of the company’s apparent unwillingness to engage in discussions with third parties regarding such alternatives”.
News of Jana’s stake also sent shares in other supermarket chains higher. Kroger is up 1.8 per cent while Sprouts Farmers Market gained 2 per cent.
Whole Foods did not immediately return request for comment.