March 20, 2024

Ancora Holdings seeks board seats and CEO replacement at Elanco Animal Health

Investment firm Ancora Holdings has announced its intention to secure four board seats at Elanco Animal Health and is advocating for the replacement of the current chief executive officer, Jeffrey Simmons, citing concerns over the company's performance, Reuters reported.

The nominees for the board seats include one of Ancora's executives and individuals with backgrounds in finance and animal healthcare.

Ancora, which owns a significant stake in Elanco, has been engaging with the company, expressing concerns about various aspects including margins, drug commercialisation, shareholder returns, and governance policies.

The firm attributes a 55% decline in Elanco's share price since its acquisition of Bayer Animal Health in 2020 to Simmons' leadership. However, Elanco's representative has defended the company's performance, highlighting a recent climb in stock price, and emphasising its robust pipeline for future growth.

Elanco disclosed that four of its directors, including CEO Simmons, will stand for election this year. Simmons has been with Elanco for 15 years and played a key role in its separation from Eli Lilly in 2018.

The company has not yet scheduled its annual meeting where investors vote on directors. Elanco's recent financial results showed a mixed performance, with adjusted fourth-quarter earnings missing analysts' estimates, but total revenue growing by 5%. The company also announced a restructuring plan aimed at generating future savings.

Ancora's move echoes previous activism in the industry, with Elanco having faced pressure from activist investors in the past. The firm is concurrently challenging the board at railroad Norfolk Southern, where it is seeking changes in leadership and governance.

-      Reuters