Starboard Tells Knife River: Hit 22% Margins or Hire a Banker to Sell
KNF sits 20% above its 52-week low of $47.79.
Summary
Starboard's Jeff Smith sent the board a letter Friday saying that if Knife River can't produce 22% adjusted EBITDA margins in the near term, it should hire a banker and explore alternatives, including a sale. He argues other companies would pay a substantial premium for the assets and generate better returns. The letter follows a meeting with the company earlier this week and builds on Starboard's September disclosure of a significant stake and its 22% margin demand. The pressure is escalating: Reuters reported last Monday that Starboard is lining up director candidates for a board nomination fight. Knife River reports Q3 results Tuesday, which will show how far margins are from the 22% bar and whether the board responds before nomination season.
At the time of this announcement, KNF was trading at $57.49 on NYSE in the Real Estate & Construction sector, with a market capitalization of approximately $3.3B. The 52-week trading range was $47.79 to $96.28. This news item was assessed with positive market sentiment and an importance score of 7 out of 10. Source: Seeking Alpha.