NEW YORK (The Deal) -- Shareholders of convenience store operator Pantry (PTRY - Get Report) elected the full slate of board directors nominated by an activist group on Thursday, and one of the activists is confident that the new directors will propose value-boosting initiatives such as creating a REIT in the near future.
Four or five REITs have already called the activists over the past month to express interest in sale-leaseback deals with Cary, N.C.-based Pantry, according to Jeff Eberwein, founder and CEO of Lone Star Value Management. Eberwein said he believes sale-leasebacks of the company's prime 300 wholly owned locations could raise $450 million to $600 million for the underperforming company.
The activist group -- which is comprised of Eberwein's Lone Star and also JCP Investment Management -- succeeded in adding three directors, Todd Diener, James Pappas and Josh Schechter, to Pantry's nine-member board.
Eberwein said by phone on Thursday that he was thrilled with the shareholder support his slate received in the voting results and also during the month-long road show in which the activists pitched their case to the company's largest investors.Proxy advisory firm Glass Lewis endorsed all three of the activist group's nominees, which Eberwein said is "really unusual," while Institutional Shareholder Services got behind two of the three. About 70% of Pantry shareholders voted, with 60% backing the ISS-approved group of directors and 10% backing the company's choices, according to preliminary results, Eberwein said. The win is especially notable since the activist group holds only about 2.7% of the company's stock.