(Bloomberg) -- Activist investor Barington Capital Group wants to push out the chief executive officer of casket-maker Matthews International Corp. and will nominate three board members as part of a proxy fight with the company.
In a letter to the company on Tuesday, Barington CEO James Mitarotonda said the balance sheet at Matthews has “deteriorated” during CEO Joseph Bartolacci’s 18-year tenure.
The hedge fund, which has a 2% stake in Matthews, said that the company should start a search for a new CEO. “We do not believe that he is the right leader to unlock Matthews’ significant value potential,” Mitarotonda said. Barington didn’t identify the trio of directors it had nominated in the letter.
The board and management of Matthews are committed to serving in the best interests of all shareholders, a company spokesperson said in a statement. “As the evaluation of strategic alternatives underscores, the board and management team will continue to take actions that are in the best interests of driving long-term value creation,” the spokesperson said.
Barington has been in the stock since 2022. It has also served as a consultant for the industrial company for the past two years, it said.
The activist said Matthews should focus on its most valuable business, which is the unit that makes products for cemeteries, funeral homes and crematories. It suggested exploring options to sell underpeforming segments such as a packaging brand business.
In November, after it reported fourth-quarter results that beat expectations, Matthews shares gained as much as 24% in their biggest intraday advance ever. Its shares are still down about 18.5% this year, giving the company a market value of about $914 million.
The company has disclosed it was working with JPMorgan Chase & Co. to explore options for its portfolio in industrial technologies.
Barington, known for its campaigns at consumer and industrial companies, is part of an investor group that urged retailer Macy’s Inc. to make changes earlier this week.
(Updates throughout with statements from Barington and Matthews.)
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