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Ethanol plant, Milton, Wisconsin.

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Ethanol producer and agri-tech company Green Plains said on Wednesday it would initiate a strategic review, a year after activist investor Ancora sent a letter to its board encouraging it to do just that.

Shares jumped more than 15% in midday trading following the news, which was announced alongside the company’s fiscal fourth-quarter results. Ancora, a 6.8% shareholder per FactSet data, and Green Plains have also signed a cooperation agreement, which includes a standstill.

The strategic review will explore value enhancements up to and including a merger or sale, the company said.

“The board has decided to review the company’s strategic alternatives to determine the best way for Green Plains and its shareholders to realize the full value of the transformation we have made and are continuing to make,” CEO Todd Becker said in a release.

Ancora sent a letter to Green Plains’ board in January 2023, expressing support for Becker’s “positive” engagement but saying that the company was undervalued and should pursue a sale process.

Green Plains had diversified beyond pure-play ethanol production to build out clean sugar and corn oil production. Ancora said that while the expansion into agri-tech presented a high-margin opportunity, the ethanol business masked “the value of its strategic and highly competitive co-products.” It urged the company to explore a sale to a strategic acquirer.

Green Plains is one of the largest domestic producers of ethanol and was founded in 2004. Ethanol is blended with gasoline to help reduce transportation emissions, and the United States is by far the largest producer of ethanol globally, according to the Department of Energy.

Ancora is an activist investor that has taken positions in numerous companies, including Norfolk Southern, Disney, C.H. Robinson and Hasbro, according to 13D Monitor. It managed $8.8 billion in assets as of December.

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