Sandell Asset Management Corporation (“Sandell”), one of the largest shareholders of Bob Evans Farms, Inc. (NASDAQ:BOBE) (“Bob Evans” or the “Company”), today reminded shareholders that to follow the recommendations from ISS and Glass Lewis, the world’s two leading independent proxy voting advisory firms, Bob Evans shareholders “DO NOT VOTE” on the Company’s white proxy card. ISS and Glass Lewis have both recommended that Bob Evans shareholders vote on the GOLD proxy card.
With the Bob Evans Annual Meeting on Wednesday, August 20, 2014 rapidly approaching, Sandell urges shareholders to remember that both ISS and Glass Lewis agree on the following facts:
- Shareholders should vote GOLD – After conducting a thorough independent analysis, both proxy advisory firms concluded that fundamental change is needed on the Bob Evans Board, and as a result shareholders should not vote the Company’s white card:
- ISS: “As the dissident has made a compelling case that change to the board is necessary to improve its oversight of operations, strategy, and asset and capital utilization, as well as its alignment with shareholders, votes on the GOLD dissident proxy card FOR dissident nominees Benham, Head, Osborne, and Elson are warranted.”
- Glass Lewis: “In light of our review of the Company's shareholder returns and operating performance relative to peers, as well as certain of the Company's governance practices, we believe the Dissident has made a compelling case for change at the board… Accordingly, we recommend that shareholders use the GOLD proxy card to vote FOR Dissident nominees Benham, Elson, Head, Lynn, Weinstein and Wielansky.”
- The governance concerns at Bob Evans cannot be ignored – ISS and Glass Lewis both concluded that the Company’s track record of poor and unacceptable governance supports the need for change:
- ISS: “The dissident has made a compelling case – based on the board’s lack of responsiveness to long-term trends in operating weakness and underperformance… and worrisome signals of a malleable sense of good corporate governance within the boardroom itself – that change at the board level is necessary.”
- Glass Lewis: “In our opinion, the current board has overseen a period in which Bob Evans has veered from its core identity, leading to deteriorating operating results, which the incumbents have been unable to improve, despite the success of its competitors in doing so. Governance issues and an unwillingness to take significant steps to unlock substantial shareholder value have combined with the operating weakness to result in less-than-optimal returns for shareholders, which have lagged the returns of the Company's closest peers over most relevant periods.”
- The Company has underperformed at the expense of shareholders – The numbers do not lie, and Bob Evans’ chronic underperformance was recognized by both ISS and Glass Lewis as a malady that is unlikely to be addressed without significant change at the Board:
- ISS: “The company’s TSR (total shareholder return) performance versus peers and a relevant sector index, which was not significantly worrisome through last year, has since taken a sharp turn for the worse, strongly suggesting the market perceives the company's issues run much deeper than simply a spot of bad winter weather. In particular, this seems to reflect the emerging evidence of operating challenges that have continued even as the winter turned to spring, and the unavoidable reality that the company, despite rosy projections for the current fiscal year, has repeatedly failed over a sustained period to meet even the earnings projections of equity analysts.”
- “The company's TSR has declined precipitously. Extending the same TSR analysis forward to August 4, 2014, the company's cumulative underperformance of both benchmarks (the restaurant index and the median of its peers) has completely erased gains it took years to accumulate…Extending the 5-year TSR analysis to the same August 4, 2014 date, the company's underperformance of the two benchmarks has slipped to 80.5 and 81.3 ppts, respectively.”
- Glass Lewis: “We believe sufficient evidence exists to conclude that, in fact, Bob Evans' TSR has underperformed relative to its closest peers – whether defined by the Dissident or the Company – during most relevant periods while the Company has been under the stewardship of the current leadership team.”
- “Over the last five years, Bob Evans' TSR of 87%, while positive, significantly trailed the total returns of 278% for Cracker Barrel, 161% for the family and casual dining peers, 190% for the proxy peers and 120% for the Russell 3000 Index.”
For additional information, please visit www.RefreshBobEvans.com.
If any shareholders have questions or need assistance in voting the GOLD proxy card, please call MacKenzie Partners, Inc. at (800) 322-2885.
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