Citing a number of strategic mistakes, an investor group has issued an open letter to shareholders of Columbus-based retailer Big Lots Inc. calling for a new board that it believes can maximize and return shareholder value.

The letter is signed by New York-based Macellum Advisors Managing Member Jonathan Duskin and Ancora Executive Chairman and CEO Fred DiSanto.

In the letter, Duskin and DiSanto reference an offer Big Lots received from a nationally recognized private equity firm to enter into a sales leaseback transaction for certain of the company’s real estate valued at over $1 billion.  

“At that value, Macellum and Ancora believe that monetizing the company’s owned real estate could generate pro forma earnings per share of over $6 per share,” the letter states. “The net proceeds of this type of transaction would be worth significantly more than the current market cap of the company of $648 million, as of March 5, making the rejection of such offer very troubling to the investor group.

“With earnings per share at nearly 2x the level management just guided to for fiscal 2021, combined with a refreshed board focused on improved governance and the addition of more relevant retail and turnaround experience, the investor group believes that the board can oversee a renewed strategy for growth that can improve the company’s valuation and drive shareholder returns 3‐4x higher than the current share price.”

The letter announced an 11 percent stake that the investor group holds in Big Lots and recommended the following individuals to be named to the board: Theresa R. Backes, Suzanne Biszantz, Andrew C. Clarke, Lynne Coté, Jonathan Duskin, Steven S. Fishman, Aaron Goldstein, Jeremy I. Liebowitz and Cynthia S. Murray. 

Fishman previously served as Big Lots CEO, retiring in 2013.