UniFirst Corporation (NYSE:UNF) saw its shares climb 3.6% on Monday after activist investor Engine Capital publicly called on the company’s board to evaluate a possible sale.
In a letter addressed to UniFirst’s trustees, Engine Capital — which holds roughly 3.2% of UniFirst’s outstanding common stock — criticized the board for declining to engage in private discussions about the company’s long-term direction. The investor argued that pursuing a sale represents the most compelling path for all stakeholders, from employees and customers to shareholders.
Engine Capital’s letter expressed dissatisfaction with UniFirst’s performance in the years since former CEO Ron Croatti passed away, claiming the company has steadily ceded competitive ground. The investor contrasted UniFirst’s stagnant share price with that of rival Cintas Corporation, whose stock has surged nearly fivefold over the same period.
The letter also disclosed that UniFirst recently rejected an overture from Cintas, which Engine described as a “cash-rich premium offer.” According to the investor, turning down the proposal deprived the Croatti family — UniFirst’s controlling shareholders — of “hundreds of millions of dollars” in unrealized value.
Engine Capital further rebuked the board for opting to hold a virtual-only annual meeting on December 15, just weeks away, calling it a “manipulation of the annual meeting timing” and evidence of “blatant disregard for the Company’s shareholders.”
In its communication, Engine said it has nominated two directors, including Michael Croatti, and has also suggested an additional highly qualified candidate. The firm emphasized its commitment to securing board representation and continuing to press for what it views as a value-enhancing sale of the company.