AnthonyRosenberg/iStock Unreleased via Getty Images
Update 11:20am: Updates shares, adds details from Engaged presentation.
V.F. Corp. (NYSE:VFC) jumped 14% after activist Engaged Capital takes stake in the apparel and footwear company.
Engaged believes V.F.Corp (VFC) can realize a mid-$40 share price within three years, according to a copy of a presentation presented at an activist investor conference today
Engaged is looking for VFC to make operational improvements, including cutting costs that may be worth more than $300 million a year. The activist also wants the company to conduct a strategic review of its noncore assets and real estate and possibly look to refresh its board. Some brands VFC could look to unload include Timberland, Dickies, Supreme, and Smartwool.
Engaged also argues that V.F. Corp. (VFC) is trading at a significant discount to its industry peers and has subpar margins. VFC has a market cap of $6 billion
Engaged Capital’s Christopher B. Hetrick was scheduled to present at the 13D Monitor Active-Passive Investor Summit in NYC in on Tuesday.
Welling is said to have had constructive talks with VFC CEO Bracken Darrell, according to a WSJ report on Tuesday. Bloomberg and WSJ first reported news of the Engaged stake.
The activist stake comes after an Activist Insight report in August listed V.F. Corp. (VFC) in the 97th percentile of companies most likely to be targeted by an activist investor.
An activist may look for VFC to push for asset sales and cost cutting, the report said. An investor may also push for operational and board changes, including the sale of North Face. A potential obstacle to an activist investor is VFC’s founding Barbey family, which has a sizeable stake in the company.
A possible activist push at V.F. Corp. (VFC) comes as its shares dropped over 40% this year through Monday and the company tapped former Logitech International (LOGI) CEO Darrell as its new CEO in late June.
