Starboard Value Letter To Newell
During the second quarter of 2018, shareholders will have the opportunity to make a critical decision on the future strategic direction of Newell. While we would not typically seek to dissuade any company from pursuing divestitures that could create value on an after-tax and risk-adjusted basis, the destruction of value that has occurred under the watch of the current management team gives us pause for any divestitures they may contemplate. In addition, we are concerned that the Company’s latest divestiture plan was a hastily-designed action to deflect blame from the recent poor performance. Therefore, we strongly urge the Company to table all major divestiture decisions – unless the Company is absolutely certain of both the strategic rationale and value creation, on an after-tax and risk-adjusted basis, and polls its shareholders in this regard – until after shareholders have the opportunity to vote on the composition of the Board at the upcoming 2018 Annual Meeting.
While these have been extremely challenging times for Newell, we believe that the recent poor financial and stock price performance has created a unique opportunity to invest in an iconic company and embark on a multi-year operational turnaround that can deliver outstanding returns to shareholders. We do not believe that the current management team or Board have followed through on their commitments, and we believe it is time for a substantial change in order to chart a new course for Newell.
As always, we remain open to engaging in constructive dialogue with the Company regarding strategy and leadership. We firmly believe that the time has come for management and the Board to step aside and allow a team of proven operators and directors to put Newell on a path to significant value creation. We are laser-focused on helping Newell regain the trust of shareholders and transforming the Company into a best-in-class consumer products company. We remain extremely excited about the prospects for our value creation plan and look forward to sharing detailed specifics in the coming weeks and months as we approach the 2018 Annual Meeting.