Ethanol plant, Milton, Wisconsin.
Ethanol producer and agri-tech company Green Plains mentioned on Wednesday it could provoke a strategic review, a 12 months after activist investor Ancora sent a letter to its board encouraging it to just do that.
Shares jumped greater than 15% in noon buying and selling following the information, which was introduced alongside the company’s fiscal fourth-quarter outcomes. Ancora, a 6.8% shareholder per FactSet information, and Green Plains have additionally signed a cooperation settlement, which features a standstill.
The strategic evaluate will discover worth enhancements as much as and together with a merger or sale, the company mentioned.
“The board has determined to evaluate the company’s strategic options to find out one of the best ways for Green Plains and its shareholders to comprehend the total worth of the transformation we’ve got made and are persevering with to make,” CEO Todd Becker mentioned in a launch.
Ancora despatched a letter to Green Plains’ board in January 2023, expressing help for Becker’s “optimistic” engagement however saying that the company was undervalued and may pursue a sale course of.
Green Plains had diversified past pure-play ethanol manufacturing to construct out clear sugar and corn oil manufacturing. Ancora mentioned that whereas the enlargement into agri-tech offered a high-margin alternative, the ethanol enterprise masked “the worth of its strategic and extremely aggressive co-products.” It urged the company to discover a sale to a strategic acquirer.
Green Plains is without doubt one of the largest home producers of ethanol and was based in 2004. Ethanol is mixed with gasoline to assist scale back transportation emissions, and the United States is by far the biggest producer of ethanol globally, in line with the Department of Energy.
Ancora is an activist investor that has taken positions in quite a few corporations, together with Norfolk Southern, Disney, C.H. Robinson and Hasbro, in line with 13D Monitor. It managed $8.8 billion in belongings as of December.