One activist investor doesn’t think Bob Evans sausage should be made and consumed under the same roof.
Tom Sandell of Sandell Asset Management, who has spent three years trying to get Bob Evans to split its restaurant chain from its packaged foods business, finally pinned down management on Wednesday.
When Sandell pressed, Bob Evans Chief Executive Saed Mohseni said “all options” were on the table, though he declined to provide a timetable for reaching a decision.
“I firmly believe that these are two great businesses that can certainly thrive as a separate businesses or continue to be together,” Mohseni said during the company’s earnings call.
Last week Sandell, which has a 6.7 percent stake in Bob Evans, stepped up its efforts by releasing an 18-slide presentation, which showed the value of the packaged foods business alone could be greater than the current enterprise value of Bob Evans.
Nearly half of Bob Evans’ earnings before interest, taxes, depreciation and amortization come from its sales of sausage, dinner sides and other prepackaged foods.
In the latest quarter, sales in Bob Evans’ restaurant business declined 7.7 percent, while they grew 3.5 percent in the packaged food business.
Sandell believes that Mohseni, whose background is in restaurants, should focus on reinvigorating that franchise, rather than running two distinct business models.
Mohseni acknowledged that restaurant sales were “challenged” last quarter as the company works to implement changes to its menu.
The Ohio-based company reported earnings of 48 cents a share on net sales of $306 million. Analysts forecasted earnings of 43 cents and $311 million in net sales.
Shares gained 5 percent to close at $41.