Nelson Peltz’s next target
Unilever has faced pressure on multiple fronts for weeks, including pushback from shareholders over its now-abandoned pursuit of GlaxoSmithKline’s consumer business. Now the consumer goods giant must deal with a potentially bigger headache: Trian Partners, the activist investment firm run by Nelson Peltz.
Trian has amassed a significant stake in Unilever, DealBook’s Michael de la Merced reports. It isn’t clear how big the firm’s holdings are, though Trian began buying shares before Unilever’s pursuit of the Glaxo business became public, according to a source.
Unilever has taken fire over strategic missteps. Investors and analysts scorned the $68 billion Glaxo bid, with Unilever’s shares falling sharply after the company said it still wanted to buy the business, despite being rejected three times. And another big Unilever shareholder accused the company of neglecting business fundamentals while overemphasizing its commitment to climate and social causes.
What does Trian want? It isn’t clear what the activist is pushing for, but Peltz’s firm often demands that huge corporations — including General Electric, Mondelez and Procter & Gamble — simplify and improve their operations, and sometimes calls for them to sell off underperforming divisions. Unilever said last week that it wanted to focus on higher-growth areas like health, hygiene and beauty. Streamlining its operations would be in keeping with recent moves at other conglomerates, including G.E., J&J and Toshiba.
Is a board fight in the future? Trian has won high-profile proxy battles before, including at P.&G. in what was the most expensive war for a board seat on record. Peltz may have support from restive shareholders if he mounts a challenge at Unilever. Shares in Unilever are up 6 percent so far today.
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