Sandell Asset Management Corp urged Bob Evans Farms Inc to sell its packaged foods business, which the activist investor said could fetch more than $950 million.
Cereal maker Post Holdings Inc has expressed interest in the packaged foods business, Sandell said in a letter sent to the Bob Evans board.
Bob Evans shares were up 4 percent at $41.09 in morning trading on Thursday.
“We have maintained an active dialogue with the Sandell Group about our business,” Bob Evans spokesman Scott Taggart said in an email. “Our board is focused on ways to improve performance and enhance shareholder value and will continue to review ways to accomplish these goals”.
The Wall Street Journal first reported that Sandell was again asking Bob Evans to sell the foods business.
“Post had expressed an interest in pursuing a transaction with Bob Evans involving its packaged foods business … Post has a continuing, strong interest in pursuing a transaction,” Sandell Asset CEO Thomas Sandell said in the letter dated Wednesday.
Post Holdings also has the ability to structure a deal that could reduce or eliminate the tax consequences to Bob Evans, according to the letter.
Post Holdings was not immediately available for comment.
Sandell has been involved in a proxy fight with Bob Evans since 2013, and has been asking the company to separate its food-products business, BEF Foods, and its Bob Evans Restaurants properties.
The activist investor had also asked the company to pursue deals with investment firms interested in the real estate assets owned by the restaurant business.
Bob Evans said in March it was not currently looking at selling or spinning off the food-products business and was evaluating strategic options for all or a portion of its real-estate assets.