Updates share activity in paragraph 3, adds details about Elliot throughout, analyst quote in last paragraph
Elliott's involvement boosts investor confidence and share price
New directors bring financial and food industry expertise
By Svea Herbst-Bayliss
Feb 26 (Reuters) - J.M. Smucker SJM.N reached an agreement with activist hedge fund Elliott Investment Management to add two executives with financial and food industry experience to its board to help the jelly, peanut butter and coffee maker improve operations.
Smucker's and Elliott made the announcement on Thursday when the company reported stronger-than-expected earnings.
Shares jumped 7.5% in morning trading.
Investors reacted to stronger sales and news that Elliott now owns a stake in the company and had privately pushed for changes. The company has struggled to integrate its Hostess brand, which it acquired in 2023, and with the rising cost of coffee, which has affected its Folgers and Cafe Bustelo brands.
Both sides said it was a "constructive engagement." The size of Elliott's stake could not be determined.
ELLIOTT INVOLVEMENT TURNS AROUND SAGGING SHARES
As one of the world's most powerful investors, Elliott's involvement is often viewed as bringing new ideas and financial discipline, analysts have said.
The Orrville, Ohio-based company, also known as Smucker's, recently pledged to halt acquisitions - a move that analysts said had calmed investor worries.
Smucker's has a market value of $11.4 billion, and its shares had fallen 2.4% over the past 12 months as of Wednesday's close.
Woo-Sung Chung, chief financial officer of NRG Energy NRG.N, and David Singer, former chief executive of Snyder’s-Lance, will join the board on April 15, increasing its size to 11 directors, the company said.
Smucker's owns Jif peanut butter, Uncrustables frozen sandwiches and Hostess baked snacks. Elliott has $80 billion in assets and has pushed for changes most recently at Lululemon Athletica LULU.O and Norwegian Cruise Line Holdings NCLH.N.
On a conference call with analysts, the company said Elliott's involvement was "recent."
The new directors underscore "our commitment to continued board refreshment and will further enable the board by bringing additional skills and experiences to accelerate our ongoing business momentum," Mark Smucker, the company's chief executive and board chairman, said in a statement.
Elliott partner Marc Steinberg said the company is taking "critical steps toward ensuring (it) reaches its full potential" by adding the new directors and tackling capital allocation, operational and leadership issues.
Earlier in February, Smucker's announced several leadership changes, including eliminating the chief operating officer role.
CFRA analyst Arun Sundaram said investors applauded Elliott's involvement, given that the firm has successfully pushed for changes at other consumer-facing companies. "A fresh and diverse perspective from these new board members will be particularly welcome for the Hostess sweet-snacks business, where the acquisition and integration have not gone according to plan."
(Reporting by Svea Herbst-Bayliss in Boston and Koyena Das in Bengaluru; Editing by Shreya Biswas, Nivedita Bhattacharjee, Rod Nickel)
((svea.herbst@thomsonreuters.com; +617 233 2138; Reuters Messaging: svea.herbst.thomsonreuters.com@reuters.net/))