By Michael Elkins
Shares of Green Plains (NASDAQ:GPRE) are up 6.28% in pre-market trading on Tuesday after Ancora Holdings Group, LLC released a letter to the company’s board of directors urging the board to explore the possibility of selling the ethanol fuel company.
Ancora is the second largest shareholder of Green Plains with ownership of nearly 7% of the company’s outstanding common shares and believes that Green Plains’ underlying value is significantly greater than where its shares are trading today.
Ancora wrote in the letter “While leadership’s efforts have created significant value over the past two years, the Company’s transformation still represents a bet on the long-term potential seen by Mr. Becker and the Board. Clearly, the Board was very comfortable continually doubling down on this bet prior to the economy contracting, interest rates rising and growth companies seeing their valuation multiples reset. In 2023, however, the macro environment presents a much larger challenge to Green Plains. This reality compounds the political, execution and operating risks inherently associated with the Company continuing its transformation.”
The letter continues, “Given the aforementioned risks, and the fact that Green Plains’ underlying value is significantly greater than where its shares are trading today, we are asking the Board to commence a review of value-maximizing strategic alternatives. As detailed in this letter, we believe Green Plains’ initial transformation efforts have made it a highly attractive business for strategic acquirers in the agricultural products and energy sectors.”