By Svea Herbst-Bayliss

NEW YORK, Dec 7 (Reuters) - Activist investor Barington Capital Group has nominated three directors to the board of casket maker Matthews International MATW.O, two sources said over the weekend, launching a second proxy fight at the company months after losing its first.

Since that defeat at the company's February annual meeting, Barington has urged Matthews, a conglomerate that has technology-focused businesses and makes burial products, to invite the hedge fund onto its board, a step the company has refused to take.

Last week, Barington nominated its founder, James Mitarotonda, and two other executives with public board experience as director candidates, said the sources, who were not permitted to discuss the matter publicly.

The hedge fund has now made good on threats to launch another proxy fight over the composition of Matthews' board soon after its defeat, a move that industry lawyers and bankers said was highly unusual.

Barington has criticized Matthews' business portfolio, capital allocation, stock price and longserving chief executive. The company, which has a market valuation of $754 million, has said it has simplified its business mix and strengthened its balance sheet and is pursuing a strategic review.

The company has also cut costs and promised corporate governance improvements. It has said it sought constructive engagement with Barington.

A representative for Matthews declined to comment and a representative for Barington did not immediately respond to a request for comment.

The company has made two moves recommended by Barington, reaching deals to sell its Warehouse Automation and SGK Brand Solutions businesses in the past year.

Mathews will also put on its 2026 meeting agenda proposals to have its directors stand for election annually and remove supermajority voting requirements for mergers. The 2026 meeting has not been scheduled.

Barington, which owns 1 million shares or 3.2% of the company, again nominated Mitarotonda and investment industry veteran Chan Galbato, a former top executive at Cerberus Operations and Advisory Company.

The hedge fund also nominated Sheila Hooda, who has served as a director at mortgage insurance company Enact Holdings ACT.O. She replaces Ana Amicarella, who had been on Barington's previous slate.

At the 2025 meeting, the hedge fund secured the backing of three prominent proxy advisory firms. But shareholders, including Mario Gabelli's GAMCO and the largest index funds, largely lined up behind the company and rejected the hedge fund's candidates.

Barington has pushed for changes at iconic brands including lingerie retailer Victoria's Secret VSCO.N and department store Macy's M.N and this year's challenge at Matthews was its first proxy fight since 2015.

(Reporting by Svea Herbst-Bayliss; Editing by Cynthia Osterman)

((svea.herbst@thomsonreuters.com; +617 233 2138; Reuters Messaging: svea.herbst.thomsonreuters.com@reuters.net))