Jamba Inc. announced Monday its plan to sell company units and actively buy back shares to counter the threats thrown at the board from activist investors.
Hedge fund JCP Investment Partnership has nominated six people for the elections of a nine-person Board of Directors. If the move is successful, it will automatically secure the activist's control over the operation of 862 Jamba Juice units.
A 13D form has yet to be filed by JCP with the SEC, which signifies the activist's investment in Jamba. No communication with the company has been made public.
JCP owns 2.3% of the Jamba stocks according to a SEC filing made on Dec. 1. The company is also reviewing the board nominations. JCP is not a newbie when it comes to the restaurant industry as it has made activist investment in KFC and BAB, Inc.
Engaged Capital, another hedge fund, filed documents with SEC back in July, stating that it has seven percent of the company's stocks and also have plans to push for changes.
Jamba CEO James White said, “Over the past several months, we have been working diligently to identify cost reductions and accelerate our transition to an asset light model, which we believe will enable our company to drive growth and shareholder value.”
The proposed changes for Jamba are all part of Engaged Capital's strategy to promote and increase its share value. The company's stock has risen to 4.4 percent by this year.
Jamba announced in November the company's plan to sell 114 company-owned locations to franchisees by first-half of next year as part of their effort of reducing by 20 percent the company ownership system.
Peak Franchise Capital is asked to help lead the selling of restaurants. It previously helped Jamba sell $1 billion worth of franchises.
With its repurchase plan under federal law, the California-based retailer also plans to buy back $25 million worth of shares.
