Dissident shareholders to nominate 3 for Pantry’s board

01/23/2014 2:03 PM

01/23/2014 2:04 PM

A group of dissident shareholders plan to submit three independent candidates for election to The Pantry’s Board of Directors.

JCP Investment Management and Lone Star Value Management, which own about 1.9 percent of The Pantry’s outstanding shares, believe the Cary convenient store chain is undervalued and needs better corporate governance. In a statement, the group said Pantry’s stock performance in recent years has been “abysmal” relative to its peers and the S&P 500 index.

“We believe substantial shareholder representation is needed on the Board to ensure that appropriate actions are taken to drive better financial performance and create value for all shareholders,” the group said. “ ... The current Board has presided over a prolonged underperformance. Pantry has had 4 CEOs in the past 5 years and continues to lack a strategically coherent plan to stop the value destruction.”

In a response, The Pantry said the candidates should not be nominated to serve on the company’s board.

“After carefully evaluating several individuals put forward by the dissident group, we have determined that they do not possess the particular experience and expertise that the Company is seeking in director candidates at this time,” the statement said. “Our Board is currently composed of 10 highly qualified directors, nine of whom are independent, who together possess significant retail, convenience store, consumer packaged goods, foodservice and financial experience that is highly relevant and critical to our business.”

The Pantry said the management team that has been in place since March 2012 is executing the company’s strategy of increasing same-store sales by upgrading its stores and food offerings while investing in technology to optimize fuel pricing and looking to add value through selective acquisitions.

The Pantry has 1,541 stores throughout the Southeast, primarily under the Kangaroo Express brand.

The company’s shares were flat in Thursday trading, closing at $16.15. The stock is up about 30 percent over the past year, but is down 5 percent over a 3-year period and down 19 percent over a 5-year period.

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