ConAgra Foods Inc's long-time chief executive, Gary Rodkin, is expected to retire in the next several months, according to two people familiar with the matter, paving the way for a successor who investors hope can turn around the ailing packaged foods company.
The Chef Boyardee maker, which has a market capitalization of $13 billion, is in the early stages of reaching out to potential candidates to succeed Rodkin, the people said, asking not to be named since the matter is confidential.
Rodkin, who has been at the helm of ConAgra since 2005, has been under pressure from shareholders to fix problems resulting from the Omaha-based company's troubled $5 billion acquisition of private brands business Ralcorp in January 2013.
A ConAgra spokeswoman did not immediately respond to requests for comment.
With its purchase of Ralcorp, ConAgra became the biggest U.S. private-label food company. But that business of selling food under supermarket brands has struggled to reach promised profit targets, in part due to cut-price deals Ralcorp had struck with customers before it was taken over.
Shares of ConAgra, which were trading at around $30 before the Ralcorp takeover, are now trading at roughly the same level.
Rodkin, 62, said in June that the company, which also makes Slim Jim meat snacks and Healthy Choice frozen meals, had underestimated the issues it inherited by buying RalCorp, which had just started to restructure.
"We knew there would be work to do but underestimated the degree of difficulty and the amount of time it would take to course-correct," Rodkin said on the most recent earnings conference call.
Before the acquisition by ConAgra, Ralcorp was the target of activist investment fund Corvex Management, who had been pushing the company to consider alternatives including a sale.
In the most recent quarter ended May 25, ConAgra reported fourth quarter earnings of 55 cents per share, which was lower than its forecast of 60 cents per share.
ConAgra's shares have fallen around 9 percent so far this year even as food stocks have climbed across the board. The S&P Food & Beverage select industry index has gained more than 4 percent year-to-date buoyed by large deals like Tyson Foods Inc's $8.55 billion offer for Hillshire Brands Co.
Rodkin previously served as chairman and chief executive officer of PepsiCo beverages and foods in North America.
© 2017 Reuters All rights reserved.
