A group of shareholders led by Barington Capital Group LP has asked consumer products maker Lancaster Colony Corp. to change its governance policies, according to a filing on 25 June 2007 with the Sec…
A group of shareholders led by Barington Capital Group LP has asked consumer products maker Lancaster Colony Corp. to change its governance policies, according to a filing on 25 June 2007 with the Securities and Exchange Commission. The investors reported owning 1.7 million shares, representing a 5.3% stake in the Columbus, Ohio-based company. In a letter to the board dated 22 June 2007, Barington chairman and CEO James A. Mitarotonda criticized chairman and chief executive John B. Gerlach Jr. and the company“s founding family for consolidating their control of the company. Mr. Mitarotonda said Barington questions if Gerlach will make “substantive changes” to the company. He also criticized Lancaster“s “veritable fortress of antitakeover defenses”. “We believe that the numerous defenses the company has in place are excessive and demonstrate a disregard for the interests of Lancaster“s public shareholders by facilitating the entrenchment of the company“s directors and executive officers and minimizing the influence that shareholders (other than the Gerlachs) have on the board”, he wrote. Earlier in June 2007, Barington asked the company, which sells specialty foods, candles, glassware and car accessories, to sell its non-food segments and consider cost cuts to improve the profitability of its specialty foods business. Lancaster said in April 2006 it was considering strategic alternatives, including a sale of its automotive unit and its glassware and candles businesses. Barington also urged the company to take on USD 300 million in debt to finance a self-tender offer, or similar transaction to create value for shareholders.
