#ANCORA BERRY FULL#

Shareholders are unlikely to have more patience in light of the following returns: 2Īverage - Rigid & Flexible Plastic Packaging With that said, the Company has now underperformed across various long-term horizons. We believe Berry’s shareholders have been extremely patient and consistently given the Board the benefit of the doubt in recent years. It is unclear whether the current Board has a viable plan for unlocking that type of value on a standalone basis any time soon.Ī CLOSER LOOK AT BERRY’S UNDERPERFORMANCE AND TRADING DISCOUNT A review of relevant and comparable acquisitions indicates shareholders could receive $100 per share or more in value via a sale. Certain shareholders, including us, now believe they may be best served by seeing the Company sold to one of the many well-capitalized financial sponsors and strategic buyers in the marketplace.

In recent months, we have had conversations with a number of fellow shareholders who expressed their own concerns about Berry’s share price stagnation and valuation discount. We believe Ancora is not the only shareholder that feels the Board should commit to reviewing its existing strategy relative to alternatives. A credible capital allocation policy that prioritizes returning cash to shareholders could be one remedy for Berry’s punishing valuation gap. This suggests to us that Berry’s persistent valuation discount is linked to the risk of the Board continuing to allocate capital to acquisitions, rather than simply being the result of the Company’s leverage ratio. But even now that the Company's leverage ratio is within its target range, its shares still continue to underperform the market.

Shareholders have historically suffered as the Company, which was previously saddled with immense debt, pursued deals with excessively high leverage ratios, causing its shares to trade at an acute discount. 1 Additionally, we remain concerned by Berry’s acquisition track record and leverage philosophy. Regrettably, these results have been accompanied by a paltry 29.7% share price uptick during his nearly five-year tenure. Salmon has presided over a 113.4% increase in annual revenues, an 83.8% increase in annual EBITDA and, most importantly, a 134.3% increase in diluted earnings per share. We have spent significant energy and time analyzing Berry’s operational and financial performance since Tom Salmon became Chief Executive Officer in February 2017.

#ANCORA BERRY FULL#

It is now necessary to initiate a comprehensive review of strategic alternatives, including a full sale or go-private transaction. As total shareholder returns have lagged in recent years, the Board has repeatedly failed to establish an accretive capital allocation policy and seize opportunities to monetize non-core real estate assets. Not only is the size of the accelerated share repurchase transaction wholly insufficient, but the Board did not even increase its existing authorization. We deem Wednesday afternoon’s announcement of $50 million in planned share repurchases to be an insult to investors. In our view, it is time for the Board of Directors (the “Board”) to take real action to address the impediments to value creation that have compounded at Berry. However, despite these tailwinds, Berry has been a chronic underperformer that perpetually trades at a significant discount to the broader market, relevant indices and packaging peers. We also believe Berry has a capable management team that deserves credit for driving meaningful sales growth and earnings improvements in recent years. We believe Berry has a high-quality portfolio of packaging products and a unique value proposition to offer the global manufacturing sector.

(“Berry” or the “Company”), with ownership of approximately one percent of the Company’s outstanding shares. Ancora Holdings Group LLC today announced that it has sent the below letter to Berry Global Group, Inc.’s (NYSE: BERY) Board of Directors.Īncora Holdings Group LLC (together with its affiliates, 'Ancora' or 'we') is a shareholder of Berry Global Group, Inc.

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