Activist investor Starboard Value has built a substantial stake in Knife River Corp (KNF) and is urging the construction materials and contracting services provider to either enhance its profit margins or consider a sale. This news was reported by The Wall Street Journal, citing sources familiar with the matter.
Starboard believes Knife River's business, characterized by high barriers to entry, could be an attractive acquisition target for potential suitors. The activist investor also wants Knife River to commit to narrowing the gap between its EBITDA margins and those of its industry peers within the next few years, according to the report. Starboard has a history of successful activist campaigns in the industrial sector, with an average return of 50.55% on 18 prior situations, significantly outperforming the Russell 2000's average of 11.73% during the same periods. Their overall average return across 162 campaigns is 21.13% versus 14.24% for the Russell 2000.
Following the Wall Street Journal report, Knife River's stock initially rose by 5.3% in after-hours trading on Wednesday. However, the company's stock had dropped over 7% during regular trading hours on Wednesday after an investor presentation where the company acknowledged ongoing headwinds such as project delays and rising fuel costs, which are expected to impact the full fiscal year. Year-to-date, Knife River (KNF) was down 26.9% as of its last close.
Starboard's recent activism also extends to Fluor, a holding company providing engineering, procurement, and construction services. Starboard announced a nearly 5% position in Fluor in October 2025, intending to unlock value from Fluor's approximately 39% holding in NuScale Power, a nuclear tech company. This stake in NuScale is valued at approximately $4.3 billion, representing more than 60% of Fluor's market capitalization. Starboard has proposed options like selling the position, an exchange offer, or a tax-free spinoff of the NuScale stake, suggesting a potential upside of over 200% for Fluor through such a separation.
