Shareholder presses for Bob Evans Farms to split company

Sandell wants to 'unlock shareholder value' by spinning off food business


September 24, 2013

A major shareholder is urging Bob Evans Farms to split up its restaurant and food service business, and to sell and lease back its substantial real estate holdings to “unlock shareholder value.”

New York hedge fund adviser Sandell Asset Management recently purchased 1.4 million, or 5.1 percent, of Bob Evans’ shares at more than $55 a share. In a letter dated yesterday to Bob Evans board members, the alternative investments manager called on the Columbus-based company to spin off its food service business to shareholders, and to sell and lease back its 482 company-owned restaurants.

The management firm also wants Bob Evans to use proceeds from both sales — the sale of real estate alone could generate up to $1 billion, according to Sandell — to offer to buy back shares from existing shareholders at $58 a share.

The so-called “self-tender” for its own shares often is used as a defense against a hostile takeover.

A Bob Evans representative was unavailable for immediate comment. Bob Evans shares were up more than 3 percent to $58.87 in late-morning trading.