Shares of Knife River rose after The Wall Street Journal reported that activist investor Starboard Value has built a stake in the construction company and is pushing management to explore a sale or improve its margins.

Knife River's stock climbed 4%, to $53.47, after-hours Wednesday following the Journal's report. The shares closed down 7.9%, at $51.43, and have fallen 27% this year.

The Journal reported that Starboard believes the 2023 spinoff of Knife River from MDU Resources Group failed to improve the business's margins, citing people familiar with the matter.

The investor wants the company to commit to narrowing the gap between its margins and those of its peers, as well as to explore strategic alternatives including a sale, the Journal reported.

Knife River shares fell earlier Wednesday after the company published an investor presentation detailing headwinds to the business, including delayed jobs and higher fuel costs.