Ethanol plant, Milton, Wisconsin.
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Ethanol producer and agri-tech firm Inexperienced Plains stated on Wednesday it could provoke a strategic assessment, a yr after activist investor Ancora despatched 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 corporate’s fiscal fourth-quarter outcomes. Ancora, a 6.8% shareholder per FactSet knowledge, and Inexperienced Plains have additionally signed a cooperation settlement, which features a standstill.
The strategic assessment will discover worth enhancements as much as and together with a merger or sale, the corporate stated.
“The board has determined to assessment the corporate’s strategic options to find out one of the best ways for Inexperienced Plains and its shareholders to appreciate the total worth of the transformation now we have made and are persevering with to make,” CEO Todd Becker stated in a launch.
Ancora despatched a letter to Inexperienced Plains’ board in January 2023, expressing help for Becker’s “constructive” engagement however saying that the corporate was undervalued and may pursue a sale course of.
Inexperienced Plains had diversified past pure-play ethanol manufacturing to construct out clear sugar and corn oil manufacturing. Ancora stated that whereas the enlargement into agri-tech introduced a high-margin alternative, the ethanol enterprise masked “the worth of its strategic and extremely aggressive co-products.” It urged the corporate to discover a sale to a strategic acquirer.
Inexperienced Plains is among the largest home producers of ethanol and was based in 2004. Ethanol is mixed with gasoline to assist scale back transportation emissions, and america is by far the biggest producer of ethanol globally, in response to the Division of Power.
Ancora is an activist investor that has taken positions in quite a few firms, together with Norfolk Southern, Disney, C.H. Robinson and Hasbro, in response to 13D Monitor. It managed $8.8 billion in property as of December.
