Blackwells Capital LLC is urging the board of SuperValu Inc. to hold constructive discussions with its shareholders in a bid to "reverse the continued destruction of shareholder value."
Blackwells, which owns a 5.2% stake in the U.S. retail chain, issued a new letter May 17 in response to SuperValu's "ineffective half measures" over its attempts to talk to the company's management and board about ways to reverse the retailer's decline in value.
"With the share price still trading near six-year lows after the recent fourth-quarter earnings, it is more evident than ever that the markets have lost all confidence in Supervalu's current strategy, and in a board that does not lead, but simply reacts."
The activist investor has been pushing for change at the Minnesota-based chain since October 2017. In March, the investment firm identified six director nominees for the company as part of its campaign to turn around SuperValu's underperformance. The firm said SuperValu's board preemptively publicized only a part of the nomination notice and "mischaracterized" its intentions and rights as a shareholder.
Blackwells added that SuperValu still has not announced a date for the company's annual meeting, which normally occurs mid-July.
"We continue to strongly encourage you to engage with your shareholders. Enter into constructive discussions about ways to strengthen this Board. Take the time to meet with each of our extraordinary board nominees. Fulfill your fundamental duties by scheduling an annual meeting. Procrastination, delay tactics and defensive half measures are elements that got us to where we are, not to where we should be. Stop the value destruction for the benefit of all shareholders," the firm said.
In April, the retailer reportedly considered selling the whole business following pressure from Blackwells. It already agreed to sell 21 stores of its subsidiary Farm Fresh Food & Pharmacy after Blackwells wrote a letter to the company, urging it to divest its retail division and its wholesale business to a buyer.
