After an investor built up an activist stake in Lowe’s, the Mooresville-based home improvement retailer has announced three new appointments to its board of directors.
The hedge fund D.E. Shaw Group has been a Lowe’s shareholder for years but started building up an activist stake in the company last fall, according to a person familiar with the matter. The firm now has an approximately $1 billion stake in the company.
Shares of Lowe’s, which has a market value of about $87.1 billion, closed up more than 3 percent Friday at $104.97.
In a statement Friday, Lowe’s said its new board members will be: David Batchelder of Relational Investors, Lisa Wardell of Adtalem Global Education and Brian Rogers of T. Rowe Price. Batchelder and Wardell’s appointment is effective March 22. Rogers is in the process of receiving the necessary consents from his other boards before joining Lowe’s at a later date, the company said.
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The three new members will also be up for election at the company’s annual shareholders meeting this spring. The Lowe’s board currently has 12 members.
Batchelder has pushed for change at firms such as energy company Hess Corp., which he urged to bring in more board members with industry experience in 2013. He is also a former director of Atlanta-based rival Home Depot.
Lowe’s financial performance has lagged behind Home Depot, and the company has been working to cut costs in recent years. In the third quarter, heavier store traffic and strong demand for hurricane-related supplies provided a tailwind for Lowe’s, however.
In Friday’s statement, Lowe’s CEO Robert Niblock said the company has valued “the constructive discussions we have had with the D. E. Shaw Group.”
Added Quentin Koffey, a portfolio manager at D. E. Shaw: “Lowe’s is an excellent company with tremendous value creation opportunities in front of it, and we believe the new directors will be significant assets to the board.”
Bloomberg first reported last week the investment firm was building an activist stake in Lowe’s. The investment firm plans “to use its holding to agitate for changes at Lowe’s,” the news service reported.
The source familiar with the matter told the Observer that layoffs are not anticipated as part of any changes. Lowe’s isn’t going to cost cut its way into being a better performer, the source said, speaking on the condition of anonymity because he wasn’t authorized to speak publicly on the matter.