This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Sandell Asset Management Urges Bob Evans Farms To Take Actions To Unlock Shareholder Value

Stocks in this article: BOBE

The Board of DirectorsBob Evans Farms, Inc.Attention: Corporate Secretary3776 South High StreetColumbus, OH 43207

Ladies and Gentlemen:

Based on the previous discussions that we have had with Steven Davis and Michael Gasser, you may be aware that Sandell Asset Management Corp. (“Sandell”) is among the largest shareholders of Bob Evans Farms, Inc. (“Bob Evans” or the “Company”), with beneficial ownership of approximately 1.4 million shares, or 5.1%, of the Company. This, we point out, is significantly more than the collective outright ownership of all of the Company’s directors and officers combined. It is therefore clear that we have a great interest in seeing the stock price of Bob Evans better reflect the intrinsic value of the Company’s unique assets. We believe this value may range from approximately $73 per share to $84 per share, for an average value of $78.50 per share.

It was our understanding from our recent conversation with Mr. Gasser that he would discuss with the entire Board of Directors (the “Board”) the matters set forth in our August 5 th letter to him and we appreciate his efforts as Lead Independent Director to serve as a liaison between the Board and the shareholders. We are therefore somewhat encouraged by the Company’s incremental $150 million share repurchase “authorization” that was announced in Bob Evans’ August 19 th earnings release. That said, we are troubled by the fact that the same earnings release made no mention of other key matters that we addressed in our letter, many of which we repeat below.

We believe that Bob Evans suffers from a conglomerate discount as a result of the Company’s two disparate business segments: a restaurant business, Bob Evans Restaurants, and a packaged foods business, BEF Foods. Due in part to this conglomerate structure, which has negatively impacted analyst coverage and ignores the different constituencies of restaurant and packaged foods investors, the Company has traded at a perennial discount to its restaurant peers, and at an even greater discount to companies in the packaged foods space. Given this history, it is particularly concerning to us that management continues to proclaim the “corporate synergies” and “cross-segment strategies” between Bob Evans Restaurants and BEF Foods. The benefits of continued integration between these two businesses do not seem compelling and we believe that management may be touting these perceived benefits to justify the preservation of their “empire” and their refusal to separate these two businesses. In addition, we believe that the market is not affording Bob Evans adequate value for its substantial real estate holdings, which include its 482 wholly-owned restaurant properties.

2 of 5

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,804.80 +26.65 0.15%
S&P 500 2,070.65 +9.42 0.46%
NASDAQ 4,765.38 +16.9840 0.36%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs