Activist Barington asks casket maker Matthews for board seats, warns of second battle

By Svea Herbst-Bayliss

NEW YORK, July 1 (Reuters) - Barington Capital Group on Tuesday urged casket maker Matthews International MATW.O to fix its business and immediately invite the activist investor onto its board, or possibly face another clash with the group next year.

Barington criticized Matthews' business portfolio, capital allocation, lagging stock price, and long-serving CEO in a letter seen by Reuters.

The investor heaped fresh pressure on Matthews by underscoring the same issues that formed the backbone of its high-profile fight for three seats, which it lost, earlier this year.

Barington wants the company, a conglomerate which has technology-focused businesses plus products for burying the dead, to add its director candidates to the board now and not "wait for the 2026 annual meeting."

A representative for the company did not have an immediate comment on Barington's letter.

Matthews stock price dropped 12% in the first six months of the year, the letter says, when the broader S&P 500 index gained 4.4% and Matthews' peers gained 3.3% on average.

Barington chief executive James Mitarotonda blamed Matthews CEO Joe Bartolacci "for this persistent pattern of underperformance" and wrote that he and other Barington board candidates could help fix the company now.

"Our participation is essential to execute the fundamental changes necessary to create long-term value," the letter said, warning if no board seats are offered "we remain prepared to pursue all available alternatives to protect our investment."

This suggests Barington may launch a second campaign for change at Matthews next year after shareholders in February blocked the activist by re-electing all company directors.

Barington, which had support from three proxy advisory firms that guide how shareholders vote, bought more Matthews stock after its defeat, raising its stake in the company to roughly 3% from 2%.