Investor Activism: Elanco Animal Health Settles with Ancora, Adds New Board Members

Elanco Animal Health Inc ELAN has reached a settlement with Ancora, enabling it to sidestep a potential proxy fight with the activist investor, expanding the board to 14 members.

Ancora’s nominees, Craig Wallace and Kathy Turner, are on its board while retaining its Chief Executive Officer, Jeff Simmons. 

Ancora owns approximately 3% of the outstanding common stock of Elanco Animal Health.

The settlement marks a significant development in Elanco’s corporate governance as it navigates through investor activism. Ancora, with a substantial stake in Elanco amounting to approximately $250 million, had been advocating for various changes within the company, including restructuring its board and succession planning.

Related: This Pet Health Company Sees Growing Demand For Farm-Animal Products, Cost Savings From Restructuring.

In February, Ancora said, “Based on extensive analysis and good faith engagement with Elanco, it appears that the biggest barriers to success are the company’s insular Board and unaccountable CEO. It is important to stress that we provided Elanco with a detailed analysis of its issues pertaining to corporate governance, finance, operations, and product development while also privately proposing a settlement framework that accounted for a shareholder-driven refreshment of the board and an orderly succession process in 2025 for long-serving CEO Jeff Simmons.”

Shares in Elanco have witnessed a notable surge since the beginning of the year, underlining investor optimism regarding the company’s trajectory. With a current market value of $8 billion, Elanco appears poised to leverage this momentum to address the concerns raised by Ancora and bolster its position in the market, Bloomberg noted.

Craig Wallace, former CEO (North America/Pacific) of animal health company Ceva Santé Animale, and Kathy Turner, previously the global chief marketing officer at IDEXX Laboratories Inc IDXX, are set to join Elanco’s board as part of the settlement. 

Elanco’s proactive approach to resolving its differences with Ancora underscores the company’s dedication to fostering constructive shareholder engagement while maintaining its strategic direction and leadership continuity, the Bloomberg report added.

Price Action: ELAN shares closed at $16.28 on Thursday.

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