Starbucks nearing agreement to give activist investor group board representation

Starbucks Corp. is discussing a settlement with Elliott Investment Management that would give the activist investor representation on the board of the coffee shop chain, people familiar with the matter said.

Seattle-based Starbucks is in talks to add Jesse Cohn, a managing partner at Elliott, to its board of directors, according to the people. Elliott could seek more than one representative on the Starbucks board, they said.

Starbucks is also considering setting up committees to review capital allocation and operational improvements, as part of any settlement with Elliott, the people said, asking not to be identified discussing confidential information.

Elliott in addition wants Starbucks to commit to reviewing its business in China, the people said.

Starbucks is already in the early stages of exploring “strategic partnerships” in China as it looks to accelerate growth and remain competitive, Chief Executive Officer Laxman Narasimhan said on a call with analysts in July.

In the past, the company has undertaken joint ventures and other partnerships on technology, real estate and supply chains in the country, he said. The business in China has been under pressure in recent years, first because of pandemic restrictions and now because of a cooling economy.

CNBC reported earlier Monday that Starbucks and Elliott are discussing a possible settlement. Talks are ongoing and no final decisions on personnel or strategy have been made, the people said. Representatives for Elliott and Starbucks declined to comment.

Shares in Starbucks rose as much as 4.5% on Monday. The stock was up 3.5% at 11:26 a.m. in New York, giving the company a market value of about $88 billion.