Advance Auto Parts to add 3 new directors after Dan Loeb’s firm takes stake
Dan Loeb, the billionaire founder of Third Point hedge fund, acquired an ownership stake in Advance Auto Parts — and struck a deal with the struggling company Monday to add three new directors to its board.
Third Point teamed with Saddle Point — run by Roy Katzovicz, a former partner at Bill Ackman’s Pershing Square Capital Management — on the investment last year after Saddle Point had begun researching the company in 2022, sources familiar with the matter told Reuters.
The activist investors now hold a nearly 5% stake in the aftermarket car-parts retailer, which owns and operates 4,786 stores nationwide.
Shares of the Raleigh, NC-based company surged by more than 3.6%, to close at $75.77, after the Wall Street Journal announced a deal was imminent late in the trading day.
However, the company’s stock is down nearly 70% since flirting with the $250 a share threshold in February 2022.
The expansion to the company’s current nine-member board comes as Advance Auto Parts lags behind rivals AutoZone and O’Reilly Automotive.
Joining the board immediately are: Brent Windom, who had been CEO of automotive refinish, industrial coatings and automotive aftermarket parts distributor Uni-Select; Gregory Smith, executive vice president at medical device company Medtronic, and Thomas Seboldt, who spent much of his career at O’Reilly Automotive.
“These directors’ automotive industry and supply chain experience will help us progress in our plan to return the company to profitable growth,” said Gene Lee, independent chair of Advance Auto Parts’ board of directors.
Talks between Third Point and Advance Auto Parts began earlier this year – just weeks after Shane O’Kelly took over as the company’s new chief executive officer, sources told the Journal.
Third Point has backed O’Kelly to remain as CEO ahead of the company’s annual shareholder meeting in May, the outlet reported.
Under O’Kelly, Advance Auto Parts began the process of selling off its subsidiary, the wholesale distributor Worldpac, as well as its Canada-based business.
Both Third Point and Saddle Point have pursued an activist playbook, with Loeb most recently threatening a proxy fight at Bath & Body Works last year.
The two funds are now the first activists Advance Auto Parts has faced after Starboard Value took a position and the firm’s chief investment officer, Jeffrey Smith, joined the board in 2015.
He stepped down in 2020.
Smith helped bring on director Eugene Lee, who had been chief executive officer of Darden Restaurants, and became chairman of the board at Advance Auto Parts in 2020.
With Post wires