Activist Starboard prepares to nominate directors at Knife River, sources say

Starboard Value, a prominent hedge fund, is set to propose new board directors for Knife River Corp, according to sources. The activist investor aims to pressure the construction company into boosting its profit margins or considering a sale. Starboard recently acquired a substantial stake in Knife River, headquartered in Bismarck, North Dakota, and has been urging management to boost margins to 22% by fiscal year 2029.

The company's market value stands at $2.8 billion, and its stock price has declined by 24% over the past year. As of the quarter ending June 30, Knife River reported margins of around 15%, significantly lower than the 30% achieved by rivals. In response to Starboard's investment announcement, the company stated commitment to margin expansion and growth, confident in its management and strategy.

Despite this, Starboard is now poised to take further action by nominating new directors to the company's board, according to individuals familiar with the fund's plans. The board currently consists of seven members. Starboard's managing member and chief investment officer, Jeffrey Smith, is scheduled to discuss the fund's investments at an upcoming investor summit in New York.