Activist investor Starboard piles on pressure for Lamb Weston

Core Viewpoint - Lamb Weston is under pressure from activist investors, particularly Starboard Value, to consider the sale of its international assets and to enhance its transformation initiatives [1][2]. Group 1: Activist Investor Involvement - Starboard Value has acquired a significant shareholding in Lamb Weston and is advocating for a strategic review of the company's overseas assets, including potential sales in the APAC region [1][2]. - Jana Partners, another activist investor, previously criticized Lamb Weston's management for underperformance and suggested that the company's shares were undervalued, presenting an attractive investment opportunity [2][3]. Group 2: Management and Strategic Changes - Following criticism from Jana Partners, Lamb Weston appointed a new CEO, Michael Smith, in early 2025, who was previously the COO [3]. - Changes to the board were made at the request of activist investors, leading to the initiation of a $250 million cost-savings program [3]. Group 3: Financial Performance and Recommendations - Starboard Value believes Lamb Weston is positioned to enhance shareholder value but urges the company to double its cost-savings target to $500 million by 2028, which would adjust SG&A to approximately 4.5% of net sales [4]. - The investor noted that Lamb Weston's revenue growth has primarily been price-driven rather than volume-driven, indicating a need for improved operating leverage [4]. - Starboard highlighted that the company's APAC assets are facing competitive pressures that have negatively impacted profitability and distracted from the turnaround efforts [5][6].