Organic Food Supplier SunOpta Slumps After Concluding Review

  • SunOpta gets $85 million Oaktree investment, 3 new directors
  • Activist investors had pushed for potential sale of company

SunOpta Inc., a Canadian organic food supplier pushed by activist investors to explore a sale, tumbled the most in four months after announcing the conclusion of a strategic review with a shake-up of its board and an $85 million stock sale.

The stock closed down 6.1 percent at C$8.69 in Toronto, the biggest decline since June 8.

SunOpta had gained earlier this after year hiring Rothschild Inc. to review its operations as Tourbillon Capital Partners, its largest shareholder, urged the board to explore a sale. Engage Capital, another activist investor, held talks with the Mississauga, Ontario-based company. It too saw potential value in a sale of the company, a person familiar with the talks said last month.

SunOpta said Friday it sold $85 million of preferred stock to Oaktree Capital Management and appointed three new directors -- two nominated by Oaktree and another nominated by Engaged. There was no mention of a sale.

Chief Executive Officer Rik Jacobs told analysts on a call that while the company received a "whole host" of different offers, the Oaktree proposal was the most compelling. Jacobs said he doesn’t expect a "fundamental change" in the direction of the company and that more details on the review will be discussed when SunOpta reports third-quarter earnings.

“SunOpta is a natural fit for Oaktree given our experience in the consumer and food industries,” Matt Wilson, managing director and co-portfolio manager of Oaktree, said in a statement. “We see a significant opportunity to provide strategic, operational and financial support.”

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