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Shareholder backs Blackwells in SuperValu proxy fight

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Shareholder backs Blackwells in SuperValu proxy fight

D3 Family Funds, which owns 1.4% of SuperValu Inc., will support the slate of directors nominated by Blackwells Capital LLC as the activist investor continues to push for change at the Minnesota-based retail chain.

In a May 30 release, D3 said it will vote all of its 550,000 shares in SuperValu in favor of the six director nominees put forward by Blackwells. It also called on the board to adopt a 10-member board instead of nine so it can also vote for SuperValu President and CEO Mark Gross, Eric Johnson, Francesca Ruiz de Luzuriaga and Mary Winston as directors alongside Blackwells' slate.

"While SVU's current board of directors deserves kudos for its diversity, its selection of Mark Gross to lead SVU, and its support for Gross' strategy, the board has presided over such a massive and long-running decline in SVU’s share price that accountability simply demands changes," David Nierenberg, D3's founder and managing partner, said in the statement.

Nierenberg said they believe the combination of growing SuperValu's wholesale grocery business and divesting most of its retail grocery stores, along with selling and leasing back its distribution centers to pay down debt, can potentially improve the company's share price.

"With the right board in place, with the right urgency, accountability, and serious skin in the game, we believe that SVU management could have the time and the support it needs to execute that strategy," he said, adding that if the existing board remains in place, there is a substantial risk that a hostile acquirer could offer to purchase the company for $24 per share since the existing board only holds very little purchased equity.

D3's statement came less than two weeks after Blackwells called on SuperValu's board to engage with shareholders and meet with the firm's board nominees to "reverse the continued destruction of shareholder value." On May 29, Blackwells sent a new letter to SuperValu requesting to inspect its books and records with respect to the use of the company's private jet and related corporate policies.

Blackwells holds 5.8%, or 2,243,800 shares, of SuperValu as of May 29.