1 big thing: Activist investor takes on car auction company

2. The BFD: Kohl's attracts another suitor 

3. Another department store, another campaign 

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4. Retail transactions

Good morning, Retail Readers, and happy hump day! 🐫

Retail Deals

1 big thing: A tale of 3 activists campaigns

2. The BFD: Dunkin' inks sports deals

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3. Retail therapy: Macy's upgrade and PPI surge

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5. It's Personnel 

🐫 We're nearly over this week's hump Retail Readers! 

In the immortal words of Austin Powers, "allow myself to...introduce...myself." Michael Flaherty here, normally the editor/co-conspirator with Richard. Richard's out today, so I'm coming in from the bullpen like Ricky Vaughan. 

📈 Situational awareness: This morning’s retail sales (+3.5%) tell us consumers and inflation are both moving up and to the right. 

Remember to tell your friends to sign up for this newsletter if you haven't already.

1 big thing: Reading the TreeHouse Foods tea leaves

Illustration of a coffee cup with steam in the shape of a dollar sign.

2. The BFD:  Kering sets sights on Maui 

3. Retail therapy

🦅 Today, March 15, is Buzzards Day. OK, I know that's not a buzzard emoji but it's the closest I could find, other than a turkey 🦃. 

1 big thing: Yum China's full plate 

Illustration of magnifying glass over china's national star

2. The BFD: Softbank cashes in on discount Coupang stake

3. TreeHouse Foods tells Jana thanks, but no

Illustration of a tree with money as the leaves. 

4. Retail therapy

5. Retail transactions

🥧  Pi Day, Retail Readers! See below for more on this particular day.

🌡  Richard is not feeling well today, so Mike's hopping in.

➗  According to the official Pi Day website, "Pi Day is an annual opportunity for math enthusiasts to recite the infinite digits of Pi, talk to their friends about math, and eat pie."

Nothing against math, but I'm going to opt for the latter option there. 

Activist hedge fund Ancora is taking aim at Hasbro. The investor is seeking the replacement of company directors and for the company to pursue the full or partial sale of Entertainment One, according to a letter seen by Axios. 

Why it matters: Hasbro is already defending itself in a proxy fight with activist Alta Fox, which has nominated directors and is pushing for the spin-off of Wizards of the Coast. 

While Hasbro has so far pushed back against Alta Fox's demands, thwarting a second activist is certainly possible but takes up even more time and energy from the management team and board. 

Of note: The pile-on by Ancora adds to the pressure on the company to pursue changes, or at least articulate why it's sticking with its plan.  

What we're watching: Whether Hasbro engages with this second activist and somehow gets the two dissident shareholders to chill out and agree to let the company move forward, albeit with a few promises to keep them happy. 

Or, whether Hasbro continues to stand its ground against the activists, leading to a rare, double-activist brouhaha at the AGM. 

Activist investor Ancora takes aim at Hasbro

Hasbro is already defending itself in a proxy fight with activist Alta Fox.

Activist shareholders

Activist hedge fund Ancora is taking aim at Hasbro. The investor is seeking the replacement of company directors and for the company to pursue the full or partial sale of Entertainment One, according to a letter seen by Axios. Why it matters: Hasbro is already defending itself in a proxy fight with activist Alta Fox, which has nominated directors and is pushing for the spin-off of Wizards of the Coast.

Since we published the calendar for AGMs of note earlier this month, a few meetings have happened, and the results give a mixed picture when it comes to activist shareholders versus management teams and boards.

Why it matters: Activist investors are built to force changes at companies. Activist campaigns that go all the way to a vote can change the construct of a board and change the direction of a company.

Details: Kohl's handed a defeat to its activist investor (Macellum) in a clear sign from investors that they were not interested in shaking up the board at a time when the company is fielding bids from buyers.

Shareholders also may have felt that the CEO and her turnaround plan are worth backing even if the company doesn't get sold.

Yes, but: Activist hedge fund Sachem Head succeeded in its effort to shake up US Food's board and management team. Ancora also struck a truce with IAA, which appointed a new director and expanded its board.

What's next: Big Lots hosts its AGM tomorrow. Mill Road, a fund with very little activist history, said it owns a 5.1% stake in the company and wants it to seek a sale.

The fund has been quiet since news broke in March of its Big Lots stake and intentions. Management or directors could address this agitation on Tuesday or leave it be.

The bottom line: Kohl's showed that shareholders want long-term outperformance, not short-term shakeups right now.

Retail proxy season comes into focus

Wall Street

Since we published the calendar for AGMs of note earlier this month, a few meetings have happened, and the results give a mixed picture when it comes to activist shareholders versus management teams and boards.Why it matters: Activist investors are built to force changes at companies. Activist campaigns that go all the way to a vote can change the construct of a board and change the direction of a company.

Fintech Deals

Brex announced today that it closed a $250 million private tender offering, intended for the fintech's employee base. 

Why it's the BFD: The move shows that the expense management company, a so-called "decacorn" given its valuation, has earned the confidence of investors and is seeking to share some of that love with its employees, as it continues to grow even amid a tech rout. 

Details: The transaction was led by Y Combinator with participation from other investors, such as Mubadala and Baillie Gifford, at a $12.3 billion valuation, the company said.

Of note: "We know that this is not an easy time for tech companies given the volatile market environment, and we are overwhelmed with the incredible support, confidence, and trust we continue to receive from our investors and customers," co-CEO Henrique Dubugras said in the note. 

Brex closes employee tender offer, at a $12.3B valuation

Y Combinator and Mubadala take part in a deal aimed at workforce.

Brex co-CEO Henrique Dubugras. Photo: Getty Images

Fintech

<a class="gtmContentClick" data-vars-link-text="Brex announced today" data-vars-click-url="https://www.brex.com/journal/employee-liquidity-program/" data-vars-content-id="c3822722-f6d5-46b9-b98e-da1cbe8d2456" data-vars-headline="Brex closes employee tender offer, at a $12.3B valuation" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.brex.com/journal/employee-liquidity-program/" target="_blank">Brex announced today</a> that it closed a $250 million private tender offering, intended for the fintech&#x27;s employee base.

Anheuser-Busch InBev suspended Budweiser sales in Russia last month. Today, the company said it would exit the region entirely by selling a stake in a joint venture with Turkish brewer Anadolu Efes.

Why it matters: The move will result in a $1.1 billion charge against the company and shows just how far executives are willing to go to distance their businesses from Russia and its leader, Vladimir Putin.

Context: It comes as beer makers exit operations in Russia.

"Danish brewer Carlsberg A/S on Thursday cut its earnings guidance and said it’s facing a $1.4 billion writedown as it moves ahead with plans to exit Russia, while Amsterdam-based Heineken NV said in late March it plans to sell its business in the country," per Bloomberg.

What's next: AB InBev said it’s already in “active discussions” with Anadolu Efes about selling the stake it's disposing to its Turkish partner.

AB InBev's Russian buzz kill

Animated illustration of four different kinds of beers.

Beer

Anheuser-Busch InBev suspended Budweiser sales in Russia last month. Today, the company said it would exit the region entirely by selling a stake in a joint venture with Turkish brewer Anadolu Efes.Why it matters: The move will result in a $1.1 billion charge against the company and shows just how far executives are willing to go to distance their businesses from Russia and its leader, Vladimir Putin.

US Foods, one of the nation's biggest foodservice distributors, is out with a fight letter this morning aimed at the activist hedge fund trying to shake up the company's board and strategic plan. 

Why it matters: The future direction of the $8.2 billion business hinges on the May 18 AGM vote, where shareholders will decide whether to stick with its board or bring in new directors from the activist's slate. 

Driving the news: Sachem Head Capital, founded by Pershing Square alumnus Scott Ferguson, has nominated five directors to serve on the company's board. 

Sachem Head (8.7% holder) originally sought control of the board with seven nominees. Last week, it cut its slate to five. 

Trimming to a minority slate from a majority is a common move in the weeks ahead of a vote, as proxy advisors tend to be less sympathetic to an activist seeking an overthrow. 

Of note: The retail sector and its affiliate branches are heavy with proxy fights at the moment (Kohl's, Big Lots, Hasbro, while Dollar Tree just settled with its activist).

Sachem Head is focused on both improving operations and the potential sale of the company, filings show. 

If Sachem Head does get inside the boardroom, surely some kind of M&A-focused move could eventually come into focus.

The bottom line: US Foods recognizes at the top of its letter today that it has previously failed to meet its own expectations in the past. The company says it's on the right path now and warns that Sachem Head's nominees will be focused only on cost cuts. 

Investors will decide whether new faces are needed on the board.

Editor’s note: This item was updated to include the additional demand by Sachem Head of exploring the potential sale of the company. 

US Foods sets stage for proxy fight with activist Sachem Head

The fight will determine US Food's board and future strategic plan

Photo: Artur Widak/NurPhoto via Getty Images

Retail

US Foods, one of the nation&#x27;s biggest foodservice distributors, is out with a fight letter this morning aimed at the activist hedge fund trying to shake up the company&#x27;s board and strategic plan. Why it matters: The future direction of the $8.2 billion business hinges on the May 18 AGM vote, where shareholders will decide whether to stick with its board or bring in new directors from the activist&#x27;s slate.

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MIchael Flaherty

Stories

Retail proxy season comes into focus

Brex closes employee tender offer, at a $12.3B valuation

Activist investor Ancora takes aim at Hasbro

AB InBev's Russian buzz kill

US Foods sets stage for proxy fight with activist Sachem Head

Newsletter editions

Retail: Hudson's Bay eyes Kohl's

🫖 Retail: TreeHouse spills tea

Retail: Yum's double whammy

Retail: Another full slate attack