Lancaster Colony Corp. (NDAQ:LANC) shares moved up marginally after Barington Capital  disclosed an 5.2% stake in the company and expressed their concerns about the company's share price performance in a Schedule 13D filing with the SEC. Specifically, the hedge fund and its partners believe that the company should implement a number of measures to improve its profitability and share price performance, including:

1. The divesture of the company's Automotive, Glassware and Candles segments.
2. A reduction in corporate level expenses resulting from Lancaster's holding-company structure.
3. The implementation of several initiatives to return the Specialty Foods segment to historical levels of profitability with an operating income margin of at least 20%.
4. A debt-financed self-tender offer to repurchase at least $300 million of the company's outstanding common stock.

Barington noted that they have had discussions with members of the company's management team with respect to some of these measures which they believe will significantly improve shareholder value. The group now seeks to discuss these measures in further detail with the company's management team and independent members of the company's board of directors. If any of the above measures are implemented it could mean substantial upside for the company's shareholders. Specifically, a spin-off or sale of any or all of the above-mentioned divisions would provide the company with additional cash and (in the event of a spin-off) opportunities for shareholders to profit in a new issue. Meanwhile, a restructuring could save the company a lot of money which would provide a visible boost to the company's earnings. And finally, a $300 million share repurchase would represent about 20% of the company's outstanding shares - a substantial number by any measure. Combined, these factors make LANC a stock worth watching over the next few months!

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