Advance Auto Parts has reached a settlement with Dan Loeb’s Third Point and activist Saddle Point, granting the activists three board seats. The company’s stock has been on a downward trend since 2022 due to elevated material, labor, and transport costs, leading to a cut in forecast and dividend.
Tom Seboldt, Gregory Smith, and Brent Windom will join Advance Auto Parts’ board immediately. The appointment of Shane O’Kelly as the new CEO in August reflects the company’s efforts to navigate through the challenges.
Following the news of Third Point’s position and settlement, Advance Auto Parts shares surged by 3.7%. The company had previously experienced a similar situation in 2015 when Starboard Value took a stake and pushed for change, resulting in a settlement.
Third Point’s Loeb expressed confidence in Advance Auto Parts’ potential for creating value for shareholders, while Saddle Point CEO Roy Katzovicz emphasized the company’s enormous potential.
As the auto parts provider continues to address its challenges, the addition of new directors with extensive industry relationships and experience is expected to contribute to its growth and value creation for shareholders.
