Activist hedge fund Trian takes stake in Unilever
Nelson Peltz’s activist hedge fund Trian Partners has taken a stake in Unilever, increasing pressure on the FTSE 100 company after its abortive pursuit of GlaxoSmithKline’s consumer health business.
People with direct knowledge of the matter told the FT that the $8.5 billion New York-based hedge fund had taken a position in shares of the British group, adding to challenges from chief executive Alan Jope.
The Unilever boss is already facing simmering shareholder discontent after his attempted £50billion takeover of the GSK business. He now faces a fierce activist fund known for demanding corporate governance and strategic change.
People with knowledge of the pile’s construction did not provide details on its size or when precisely it began.
The revelation comes after a tumultuous week for Unilever in which it was forced to acquiesce to shareholder demands to end its pursuit of GSK’s consumer healthcare business after three unsuccessful bids.
The investor revolt last week caused Unilever’s share price to fall by 11%. He recouped some of the losses after the company announced it would not increase its offer further.
The focus has been on the performance of Jope, who for three years was chief executive of the company best known for brands such as Dove soap and Hellmann’s mayonnaise.
Investors have called on him to deliver stronger results, but now he must do so with a shareholder base that has signaled wariness about using trading to move company assets into products. fastest growing.
Excluding dividends, shares of Unilever – the UK’s third-largest company with a market capitalization of £94bn – have fallen 17.7% over the past year and are only up 13.7% over the past five years.
Unilever marks the last position in the consumer goods sector for Trian, which was founded in 2005 by Peltz, Ed Garden and Peter May. He has already targeted groups such as Mondelez International, Procter & Gamble and Sysco.
Peltz quit the P&G board last year, four years after acquiring a stake and fighting for its strategy. P&G shares rose around 85% during this period and the American group simplified its business structure in 2018.
Unilever has signaled it may also be willing to simplify, promising this week to unveil a new “operating model that will lead to greater agility”.
Trian and Unilever declined to comment.
In a scathing “post-mortem” on Unilever’s failed bid for GSK Consumer Health, Top 15 investor Terry Smith last week attacked the company’s long-term performance and added: ” Unilever management’s response to its poor performance has been to utter meaningless platitudes to which it has now attempted to add significant M&A activity. What could go wrong?”
Bernstein analyst Bruno Monteyne last year flagged Unilever as a potential next venture for Peltz, saying: “There are parallels with PepsiCo, where he tried (unsuccessfully) to force a spinoff of snacks and drinks from the company.
“Some might argue that Unilever would benefit from selling off its food and refreshments division and its low-growth categories.”
Although Peltz’s campaigns were not always successful, he helped shape some of the biggest companies in the consumer sector. He failed to persuade PepsiCo to acquire Oreo maker Mondelez, but was instrumental in Kraft’s acquisition of Cadbury and the subsequent spin-off of the chocolate maker and other snack brands in the form by Mondelez.