Sun. May 29th, 2022

Nelson Peltz’s activist hedge fund Trian Partners has built up a stake in Unilever, which has increased pressure on the FTSE 100 company following its failed pursuit of GlaxoSmithKline’s consumer health business.

People with immediate knowledge of the matter told the FT that the $ 8.5 billion New York-based hedge fund had taken a position in the British group’s shares, which contributed to the challenges of CEO Alan Jope.

The Unilever boss is already facing simmering shareholder dissatisfaction after his attempt to raise £ 50 billion over the GSK business. He now has to contend with a fierce activist fund known for demanding strategic and management changes from companies.

The people with knowledge of the ring building did not provide details about its size or when exactly it started.

The revelation comes after a tumultuous week for Unilever in which it was forced to comply with shareholder demands that it cease its pursuit of GSK’s consumer health business after three failed bids.

The investor uprising last week dropped Unilever’s share price by as much as 11 percent. It recovered part of the losses after the company said it would not increase its offer further.

Attention has shifted to the performance of Jope, who has been CEO of the company for three years, which is best known for brands such as Dove soap and Hellmann’s mayonnaise.

Investors have called on him to deliver stronger results, but he must now do so with a shareholder base that has signaled his vigilance over the use of transactions to shift the company’s assets to higher growth products.

Excluding dividends, shares in Unilever – the third largest company in the UK with a market capitalization of £ 94 billion – have fallen by 17.7 per cent over the past year and risen by just 13.7 per cent over the past five years.

Unilever is the latest position in the consumer goods sector for Trian, founded in 2005 by Peltz, Ed Garden and Peter May. It has previously targeted groups including Mondelez International, Procter & Gamble and Sysco.

Peltz stepped down from the board of P&G last year, four years after acquiring an interest and struggling over his strategy. P & G’s shares rose by about 85 percent during that time and the US group simplified its business structure in 2018.

Unilever has indicated that it may also be willing to simplify itself, promising this week to unveil a new “operating model that will drive greater agility”.

Trian and Unilever declined to comment.

In a scathing “post-mortem” investigation into Unilever’s failed bid for GSK Consumer Health, top 15 investor Terry Smith attacked the company’s long-term performance last week, adding: “Unilever management’s response to its poor performance was meaningless “Platitudes at which it has now attempted to add great M&A activity. What could possibly go wrong?”

Analyst Bruno Monteyne at Bernstein last year labeled Unilever as a potential next project for Peltz, saying: “There are parallels from PepsiCo, where he (unsuccessfully) tried to force a split of the snacks and drinks from the business. .

“Some might argue that Unilever would benefit from the sale of its food and refreshment division and its low-growth categories.”

Although Peltz’s campaigns were not always successful, he helped form some of the consumer sector’s largest companies. He did not succeed in persuading PepsiCo to acquire the Oreo manufacturer Mondelez, but played a role in Kraft’s acquisition of Cadbury and the subsequent spin-off of the chocolate maker and other Mondelez-shaped food brands.

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