(Reuters) - ConAgra Brands Inc (CAG.N), the maker of Hunt’s ketchup and Marie Callender’s microwave dinners, said on Friday it had ended a standstill agreement with Jana Partners LLC, the activist hedge fund pushing for a sale of Pinnacle Foods Inc (PF.N).
The termination of the agreement, which dates back to 2015 when ConAgra and Jana reached a deal for two new mutually agreed directors to join ConAgra’s board, allows Jana to more freely push both ConAgra and Pinnacle Foods to explore a combination.
ConAgra held talks to acquire Pinnacle Foods last year, but could not clinch a deal because of price disagreements, sources said at the time.
Last month, Jana said it had amassed a 9.1 percent stake in Pinnacle Foods and that it would speak to the maker of Duncan Hines bake mixes and Vlasic pickles about it participating in industry consolidation by exploring a sale.
ConAgra said its standstill agreement with Jana ended by mutual agreement. Pinnacle Foods and Jana did not immediately respond to requests for comment on Friday.
Pinnacle Foods shares were up 4 percent at $63.16 on Friday, giving the company a market capitalization of $7.5 billion. ConAgra shares were up 2.7 percent at $36.80, giving it a market capitalization of $14.7 billion.
Packaged foods giants have struggled in recent years as shoppers switch away from processed foods to healthier fare.
U.S. food companies have also recently begun flagging higher commodities and transportation costs. Railroads and truck fleets have raised prices amid a shortage of drivers, reduced capacity, higher fuel prices and a strengthening U.S. economy.
ConAgra has been pushing hard to remake many of its most prominent brands to suit contemporary tastes, with healthier ingredients and eco-friendly packaging.
Reporting by Harry Brumpton and Greg Roumeliotis in New York, Editing by Rosalba O'Brien