Got a tip?:

Procter & Gamble Shares Pop on Activist Nelson Peltz’s Comments

Procter & Gamble (NYSE:PG), the American multi-national consumer goods corporation better known as P&G, saw its shares rise this week after activist Nelson Peltz of Trian Partners said his reorganization plan was under “very serious consideration.”

It was at the end of last year that Procter & Gamble had appointed Peltz to its board, despite him losing a proxy fight that lasted months. It was the biggest to ever involve a company in the United States. Peltz joined the board back in March after the company granted him a seat to avoid expensive legal matters.

Peltz had campaigned for his seat and had criticized the company’s bureaucracy. He had urged for cuts in management layers and cutting the company’s five global business units down to three.

In December Procter & Gamble (NYSE:PG) had said, “Because the election results were so close, and because a large number of shareholders voted for Nelson Peltz to be a director, the board has engaged in numerous discussions with Mr. Peltz regarding a board seat.”

Peltz stepped down from Mondelez, an American multinational confectionery, food, and beverage   company behind the Oreo cookie. “As a large shareholder, Trian remains a strong believer in the future success of Mondeleēz International,” said Peltz in March. He had served on Mondelez’s board since 2014.

Speaking at The Deal conference in New York City, run by Jim Cramer, CNBC’s “Mad Money” host, Peltz had said, “It’s really under very serious consideration,” of Trian Fund Management’s white paper that describes how P&G could improve. Trian’s white paper is a 94-page manifesto that was published last fall.

“Our goal is to say we’re going to have under 1,000 people in corporate, (and) under that you have three global business units,” Peltz was reported saying to Cramer.

Cramer had questioned whether a lot of value could be unlocked by breaking up the company in which, Peltz replied: “You could. … I’m hoping it doesn’t have to be.”

Peltz had also said, “These big companies, they immediately fight disruption. They want to protect their turf. Well, that’s the wrong attitude. They have to embrace disruption. They have to disrupt themselves. … If they don’t, somebody else is doing it to them.”

It was last year that Trian took a stake in P&G valued at $3.5 billion.

Shares of (NYSE:PG) closed up nearly 2% last Thursday after Peltz made the comment. The stock has a 52-week high of $94.67.

Leave a Comment