Nelson Peltz, the head of Trian Fund Management LP, said France’s Danone is undervalued and his firm plans to “engage” with management to urge the company to avoid dilutive mergers and acquisitions.
Danone, the world’s largest yogurt maker, is worth 78 euros a share, Peltz said today in an audio presentation at the Invest for Kids conference in Chicago. The stock climbed as much as 4.3 percent in Paris trading, the most in a year, after the Financial Times reported that Peltz had taken a 1 percent stake. It closed at 48.06 euros, a decline of less than 1 percent.
Peltz won’t press for a breakup or big asset sales of the Paris-based company, said a person with knowledge of the matter, who confirmed that Peltz has a stake of about 1 percent. Rather, Peltz wants Danone to tighten costs and operations and exercise more discipline with regard to acquisitions, said the person, who asked not to be identified because the talks are private. Peltz informed management yesterday that he wants to meet.
Danone is “a mispriced security where the market is wrong,” Peltz said at the conference. “We believe it’s undervalued.”