By Svea Herbst-Bayliss
(Reuters) -Jana Partners has built a new position in Lamb Weston and may push the french-fry maker to consider selling itself, the activist investment firm said in a regulatory filing on Friday.
Jana said it owns 5% of the Eagle, Idaho-based company and wants to see a strategic review in which the company and bankers would review capital spending, operating deficiencies and share-repurchase strategy.
The hedge fund also signaled it might seek board seats at the company which has a market capitalization of $11 billion.
News of Jana's stake pushed Lamb Weston's stock up 11% to $78.78. Since January, the stock has tumbled 26%.
Jana is working with Continental Grain, a privately held company that owns and operates companies in food and agribusiness, on the investment, the filing said. It is also working with Lamb Weston's former executive chairman, Timothy McLevish.
The company said it is aware of the regulatory filings by Jana and Continental Grain.
"We regularly engage with our shareholders to better understand and consider their views and will continue to do so," a representative said.
This month, Lamb Weston cut its annual profit forecast and announced job cuts amid softer spending across restaurants and heightened competition in international markets.
In the filing, Jana blames Lamb Weston for its troubles, writing of a "litany of self-inflicted missteps" that led to underperformance.
As North America's biggest producer of french fries, Lamb Weston sells its products, including tater puffs and hash-brown patties, to customers including hamburger chain McDonald's (NYSE:MCD).
A year ago, Jana called on Frontier Communications (OTC:FTRCQ) to sell itself and Verizon Communications (NYSE:VZ) made a bid last month. At that time, the hedge fund was also working with a large strategic investor that it did not identify.
Jana previously pushed for a sale of New Relic (NYSE:NEWR), which was taken private by TPG and Francisco Partners last year. It also pushed for a sale of Zendesk (NYSE:ZEN), which was taken private in 2022 by investment firms led by Hellman & Friedman and Permira.