Starboard Value Builds Stake in Knife River, Urges Sale or Margin Fix

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Summary · why it matters

Activist investor Starboard Value has built a significant stake in Knife River and plans to push the construction company to explore a sale or improve its margins, The Wall Street Journal reported. Starboard reportedly believes the 2023 spinoff of Knife River from MDU Resources failed to improve the company's margins and wants it to commit to narrowing the gap between its EBITDA margins and those of its peers in the coming years. The activist also wants Knife River to evaluate strategic alternatives including a potential sale, arguing the business has a high barrier to entry and could be attractive to suitors. Shares of Knife River rose 5.3% post-market Wednesday on the report, after falling 7.8% in regular trading Wednesday when the company said in an investor presentation that headwinds including delayed jobs and higher fuel costs are expected to persist through the fiscal year. Construction stocks have underperformed the broader market year to date as the sector faces a pullback in residential and private commercial building.

Impact on assets 2

Materials▲ · 1 stocks
Knife River Corporation
KNF
▲ PositiveCapitalrelevance

Starboard Value built a significant stake and is pushing Knife River to explore a sale or fix margins, a valuation/activist catalyst.

Energy Transition & Power Demand▲ · 1 stocks

Off-coverage companies 1

Starboard Value LPPrivate▲ Positive
Capitalrelevance

Starboard Value is the activist subject of the report, building a stake in Knife River and urging a sale or margin improvement.

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