May 24, 2023 - Economy & Business

Activist investor Jana Partners takes aim at Freshpet

Illustration of dog treats in the shape of a dollar sign.

Illustration: Aïda Amer/Axios

Activist investor Jana Partners on Wednesday launched a proxy fight at Freshpet, nominating four candidates to the pet food company's board of directors.

Why it matters: Jana is accusing Freshpet directors not only of poor management oversight, but also that they "pursued outside interests with corporate resources." 

  • Specifically, Jana is taking issue with Hive Brands, an "eco-friendly" online marketplace that Freshpet president Scott Morris co-founded.
  • Director David Basto, a Carlyle Group partner, sits on the Hive board, while Jana says that fellow director Olu Beck also advises Hive.

By the numbers: Jana says in a letter that it's amassed a 9.3% stake in Freshpet, which has a market cap north of $3 billion.

  • The firm previously pushed for Freshpet to consider a sale process, which the company rebuffed.
  • It's possible that Jana is hoping for a repeat of its past activism at retailer PetSmart, which also pushed back on sale demands until ultimately agreeing to be acquired by a group of private equity firms.

What Freshpet is saying: “The company has engaged with Jana extensively to understand their perspectives and address their concerns. Unfortunately, Jana has made clear to us that their sole purpose is to force a sale of the company without consideration to all potential paths to value creation. We are hopeful to avoid a distracting proxy fight as the management team continues to focus on driving growth and margin expansion as demonstrated in recent quarterly performance."

Go deeper