Fred’s Inc. (NASDAQ:FRED) has appointed Mr. Heath Freeman, the president of the activist investor group, Alden Global Capital LLC as the new chairman. The announcement was made during the firm’s second quarter reporting. Freeman will replace Thomas J. Tashjian, who retired recently after working at the company for 16 years. Tashjian was made a director of Fred’s in 2001 and appointed the chairman in 2016. The appointment was effective on or before August 29.
Alden is one of the Fred’s greatest shareholders, holding a 24.4% stake in the company. The appointment is influenced by the subsequent selection of the CEO Steven Rossi of Digital First Media and CEO Timothy Barton of Freightquote.com as its board of directors as part of the agreement with Alden. The addition of Freeman to the Fred’s Board is still part of the Amended and Restated Cooperation Agreement made between the two companies in August 2017.
The cooperation agreement between the two firms extends the term into 2019 and includes the updated stipulations in regard to the parties’ collaborative efforts to optimize the value of the Fred’s key investors. According to Tashjian, the new chairman comes with a diverse experience in retail, turnaround, and the financial management. Therefore, he’s expected to help in executing the company’s healthcare transformation which will accelerate the value creation for its shareholders.
Michael K. Bloom, the CEO and member of the Board at Fred’s stated that they have known Freeman for a long time through constant and productive interactions between the two firms and he is well positioned to take the healthcare company to a higher level in terms of growth and generation of encouraging cash flows.
Freeman stated that he’s eager to join the company as the Member of the Board and looks forward to continue with the work of supporting the Fred’s management team in executing their respective roles. Freeman’s new position also comes at the time when Fred’s negotiations to obtain more than 1,200 Rite Aid Corp stores were halted when the Walgreens Boots Alliance Inc. slashed its $9.4 billion partnership with Rite Aid in June.