DEFA14A: SpartanNash Amends Proxy Amid Shareholder Lawsuits

SpartanNash Company filed supplemental disclosures to its definitive proxy statement to address shareholder lawsuits alleging misleading information regarding its merger with C&S Wholesale Grocers.

Summary

• SpartanNash Company entered into a Merger Agreement with New Mackinac HoldCo, Inc., Mackinac Merger Sub, Inc., and C&S Wholesale Grocers, LLC on June 22, 2025.
• The merger involves Merger Sub merging into SpartanNash, with SpartanNash surviving as a wholly-owned subsidiary of Parent.
• A special meeting of SpartanNash shareholders is scheduled for September 9, 2025, to vote on the Merger Agreement.
• Two complaints were filed in New York County Supreme Court on August 13 and August 14, 2025, by purported shareholders Kevin O'Conner and Bruce Miller, naming SpartanNash and its board as defendants.
• These lawsuits allege the Definitive Proxy Statement contains materially incomplete and/or misleading information and seek to enjoin or rescind the Transaction, along with attorneys' fees, experts' fees, and unspecified damages.
• Additional demand letters from purported shareholders allege similar deficiencies.
• SpartanNash believes the allegations are without merit and supplemental disclosures are not legally required.
• However, to avoid delaying or adversely affecting the Transaction and to minimize costs, SpartanNash is voluntarily providing supplemental disclosures without admitting liability or wrongdoing.
• The supplemental disclosures amend and supplement sections of the Definitive Proxy Statement related to the opinion of SpartanNash's financial advisor, specifically the Selected Publicly Traded Companies Analysis, Selected Precedent Transactions Analysis, Illustrative Discounted Cash Flow Analyses, and Other Factors (Wall Street Analysts Price Targets).
• The supplemental disclosures will not affect the consideration to be paid in the Transaction or the timing of the special shareholder meeting.

Sentiment

Score: 4

Explanation: The filing addresses negative developments (shareholder lawsuits) but does so proactively to mitigate risks to the merger. The underlying merger itself is a significant event, but the current context is defensive. The company's denial of wrongdoing and assertion that disclosures are not legally required, while still making them, indicates a pragmatic but not entirely positive situation.

Positives

• SpartanNash is proactively addressing shareholder concerns and litigation to avoid delays and minimize costs associated with the merger.
• The company explicitly states the supplemental disclosures will not affect the merger consideration or the timing of the special shareholder meeting.

Negatives

• Two shareholder lawsuits and additional demand letters have been filed, alleging the Definitive Proxy Statement contains materially incomplete and/or misleading information.
• The lawsuits seek to enjoin or rescind the merger, which could disrupt the transaction.
• The company is incurring costs and risks associated with defending against these actions.

Risks

• Failure to obtain the required vote of SpartanNash's shareholders.
• The Transaction may not be completed at all, or its timing could be affected.
• Conditions to closing the Transaction may not be satisfied or waived.
• Governmental or regulatory approvals may not be obtained or may be subject to unanticipated conditions.
• Potential litigation relating to, or other unexpected costs resulting from, the Transaction.
• Legislative, regulatory, and economic developments.
• The proposed transaction could disrupt SpartanNash's current plans and operations, including dividend payments.
• Restrictions during the pendency of the Transaction may impact SpartanNash's ability to pursue business opportunities or strategic transactions.
• Diversion of management's time on Transaction-related issues.
• Continued availability of capital and financing and rating agency actions.
• Adverse effects on SpartanNash's common stock market price, credit ratings, or operating results due to Transaction announcements.
• Adverse effect on the ability to retain and hire key personnel, customers, and maintain relationships with business partners, suppliers, and customers.

Future Outlook

The company expects the Transaction to proceed as planned, with the special shareholder meeting on September 9, 2025, and the supplemental disclosures not affecting the timing or consideration. However, it acknowledges risks such as failure to obtain shareholder or regulatory approvals, potential litigation, and disruptions to operations.

Management Comments

• SpartanNash believes the allegations and claims asserted in the Matters are without merit and that supplemental disclosures are not required or necessary under applicable laws.
• However, in order to avoid the risk of the Matters delaying or otherwise adversely affecting the Transaction and to minimize the costs, risks and uncertainties inherent in defending the SpartanNash Actions, and without admitting any liability or wrongdoing, SpartanNash is hereby voluntarily amending and supplementing the Definitive Proxy Statement.
• SpartanNash denies that it has violated any laws or that SpartanNash or any member of the Board of Directors breached any duties to the Company's shareholders.
• Nothing in this Current Report on Form 8-K shall be deemed an admission of the legal necessity or materiality of the Supplemental Disclosures under applicable laws of any of the disclosures set forth herein.
• These Supplemental Disclosures will not affect the consideration to be paid in connection with the Transaction or the timing of the special meeting of the shareholders of the Company.

Industry Context

The filing provides comparative financial metrics and transaction data for companies in the food retail distribution and grocery retail distribution industries, indicating that the merger and its valuation are being assessed against established industry benchmarks and recent M&A activities. This suggests a competitive landscape where valuation multiples are a key consideration for strategic transactions.

Comparison to Industry Standards

• BofA Securities reviewed publicly available financial and stock market information for SpartanNash and selected publicly traded companies in the food retail distribution (United Natural Foods, Inc.) and grocery retail distribution (Albertsons Companies, Inc., The Kroger Co.) industries.
• The overall low to high CY 2025E / Adjusted EBITDA multiples for selected publicly traded companies were 5.2x to 7.3x, with a median of 5.5x for food retail distribution and 6.2x for grocery retail distribution.
• SpartanNash's observed CY 2025E / Adjusted EBITDA multiple was 5.0x based on SpartanNash Forecasts and 5.1x based on Wall Street research analysts' estimates, both as of June 20, 2025.
• BofA Securities applied a multiple reference range of 5.15x to 6.25x to SpartanNash's estimated CY 2025 Adjusted EBITDA for valuation.
• Selected precedent transactions in grocery retail distribution and food retail distribution industries since 2012 were reviewed, including acquisitions by The Kroger Co. (Albertsons, Roundys, Harris Teeter), Amazon.com, Inc. (Whole Foods Market), United Natural Foods, Inc. (SUPERVALU INC.), and Apollo Global Management, LLC (Smart & Final Stores, Inc., The Fresh Market, Inc.).
• The overall low to high EV / LTM Adjusted EBITDA multiples of target companies in selected precedent transactions ranged from 5.4x to 11.1x.
• BofA Securities applied an EV / LTM Adjusted EBITDA multiple reference range of 5.50x to 7.25x to SpartanNash's Adjusted EBITDA for the twelve-month period ending April 19, 2025.

Legal Proceedings

• Kevin O'Conner v. SpartanNash Company, et al., Case No. 654832/2025 (New York Sup. Ct. filed August 13, 2025).
• Bruce Miller v. SpartanNash Company, et al., Case No. 654854/2025 (New York Sup. Ct. filed August 14, 2025).
• These lawsuits name SpartanNash and its board of directors as defendants, asserting claims under New York state law.
• Allegations include that the Definitive Proxy Statement is false and misleading due to materially incomplete and/or misleading information.
• Relief sought includes enjoining or rescinding the Transaction, and an award of attorneys' fees, experts' fees, and unspecified damages.
• Additional demand letters from purported shareholders allege similar deficiencies.

Stakeholder Impact

• Shareholders: Facing a vote on a merger, subject to litigation challenging the adequacy of disclosures, and potential impact on share price.
• Management/Board of Directors: Named as defendants in lawsuits, diverting time and resources to address litigation.
• Employees: Potential impact on retention and hiring due to merger uncertainty.
• Customers, Suppliers, Business Partners: Risk of adverse effects on relationships due to merger and associated uncertainties.

Next Steps

• SpartanNash shareholders to vote on the Merger Agreement at a special meeting on September 9, 2025.
• Obtain necessary governmental and regulatory approvals for the Transaction.
• Complete the merger of Merger Sub into SpartanNash.

Key Dates

Recommendation

The filing indicates ongoing litigation challenging the merger's proxy disclosures, which introduces uncertainty and potential delays, despite management's efforts to mitigate. While the company denies wrongdoing and is proceeding with the merger, the legal challenges could still impact the transaction's terms or completion. Investors should hold and monitor the outcome of the shareholder vote and legal proceedings before making further investment decisions. The supplemental disclosures aim to address concerns without altering the deal's core terms, suggesting the underlying value proposition of the merger remains, but the legal overhang is a significant factor.

Keywords

SpartanNash, C&S Wholesale Grocers, Merger Agreement, Proxy Statement, Shareholder Lawsuits, Litigation, SEC Filing, Corporate Governance, Food Retail Distribution, Grocery Retail Distribution, M&A, SPTN