PepsiCo (PEP) Inc. said it doesn’t need large-scale acquisitions after a newspaper reported billionaire investor Nelson Peltz has built stakes in PepsiCo and food maker Mondelez International Inc. (MDLZ) and may agitate for a merger.
“We are making strong progress in our strategy to deliver long-term growth and create shareholder value, and we do not see the need for any large scale M&A,” Jeff Dahncke, a PepsiCo spokesman, said in an e-mail. He declined to comment specifically about Peltz.
The size of the stakes taken by Peltz’s Trian Fund Management LP is unclear, the Daily Telegraph reported today, citing people it didn’t identify. One of the people told the newspaper that Peltz has spent at least $2 billion on his latest foray into the food industry. Peltz could push for a merger of the two companies, the Telegraph said, citing unidentified people in London.
PepsiCo rose 3.3 percent to $78.64 at the close in New York, while Mondelez gained 4.1 percent to $29.73, for the biggest advance since Jan. 2
Jo Bradley, a U.K.-based spokeswoman for Mondelez, said the Deerfield, Illinois-based company doesn’t comment on “market rumors or speculation.” A representative at New York-based Trian didn’t immediately return a voice mail requesting comment.
Peltz, 70, is an activist investor who takes stakes in companies, particularly those in the food and restaurant sectors, and then frequently pushes for changes designed to boost their share prices.
The billionaire’s $300 million purchase of iced-tea maker Snapple in 1997 paid off when he sold it for $1.45 billion three years later. He also bought a stake in British confectioner Cadbury Schweppes Plc and pushed for a spinoff of its soda unit, prior to its 2010 takeover by Kraft Foods Inc. He also invested in ketchup maker H.J. Heinz Co., which Warren Buffett’s Berkshire Hathaway and 3G Capital agreed to acquire this year.
In November 2011, Trian reported it had purchased 2.36 million PepsiCo shares as of Sept. 30 of that year. It was the first time Trian reported investing in PepsiCo. Months later, in February 2012, Trian reported selling all its shares. At the time, investors and analysts said PepsiCo’s snack and drink units may be worth more separated as declining soft drink market share in the U.S. dragged earnings below the company’s targets.
Shares of PepsiCo and Mondelez have both outperformed the Standard & Poor’s 500 Index (SPX) over the past 12 months, with PepsiCo up 16 percent and Mondelez rising 14 percent, compared with the U.S. benchmark’s 11 percent gain.
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