Peltz's GE Stake Tops Activist Quests From DuPont to PepsiCoby
Trian Fund Management, founded by Nelson Peltz with partners Peter May and Ed Garden in 2005, manages more than $10 billion and focuses its activist investments on consumer, industrial and financial companies -- in particular conglomerates and food and beverage corporations.
The partnership began in the 1970s when May became chief financial officer of a regional food distributor controlled by Peltz, who is now 73. Over the decades, the pair built a packaging giant, a fast-food restaurant company and a beverage corporation that acquired Snapple and was ultimately sold to Cadbury Schweppes. Garden joined the pair in 2003, and the partners soon became activists.
Trian usually insists that one of its principals joins a target company’s board. In nine of Trian’s past 10 campaigns, the firm has gotten or pursued directorships.
Selected recent and past campaigns are summarized below:
General Electric Co.
--October 5, 2015: Trian disclosed 1 percent stake, valued at $2.5 billion
--Trian’s largest investment, making the fund GE’s ninth-biggest shareholder
--Released 81-page white paper, arguing its case for better shareholder returns.
--Aug. 14, 2015: the food distributor rose the most in 20 months after Trian disclosed a 7.1 percent stake and said it may seek board representation
--Less than a week later, Sysco said it was adding two directors from Trian
--Trian said it held talks with CEO, chairman about operations, capital structure, capital allocation, corporate governance and potential board seats.
--June 30, 2015: The provider of water and filtration systems gained the most in more than two years after Trian bought a stake and urged the company to buy competitors
--Trian reported a 7.2 percent stake, making it one of Pentair’s top 3 shareholders
--In September, Pentair agreed to add Garden as a director and allow one of two other Trian representatives to observe meetings.
--Trian first emerged as a critic of DuPont’s financial performance in 2013, arguing for a breakup of the company to realize shareholder value
--Things heated up last year, when Trian started publishing a series of critical presentations, lambasting $4 billion in excess costs at the more than 200-year-old company
--Both sides tried to engage, with DuPont offering one of Trian’s four board nominees a directorship; Peltz rejected the proposal, saying he’d have to have a seat too
--CEO Ellen Kullman disagreed with separation proposal, saying it would be costly and high-risk. The war of words escalated.
--May 2015, Trian suffered first proxy fight loss after shareholders of the chemical maker rejected the firm’s bid for four directorships
--Kullman announced Monday she would retire as chairman and CEO on Oct. 16.
Bank of New York Mellon Corp.
--June 2014, Trian disclosed 2.5 percent stake in BNY Mellon, seeking talks
--BNY Mellon, like other custody banks, is under pressure to trim costs as low interest rates cut income in its investment portfolio, limit revenue from securities lending and force it to waive fees on money-market funds
--December 2014, the world’s largest custody bank agreed to give Trian a seat on its board, naming Garden as a director.
PepsiCo Inc. and Mondelez International Inc.
--July 2013, Peltz urged PepsiCo to buy Mondelez and spin off beverages business; or at least separate its snack and beverage units
--In 2014, Trian abandoned the campaign to get Mondelez to merge with Pepsi-snacks and struck a truce by adding Peltz to Mondelez’s board and pushing ahead with a plan to slash costs
--January 2015, PepsiCo settled with Trian by electing to its board Bill Johnson, longtime food company executive and adviser to the activist, following proxy fight threat.
H.J. Heinz Co.
--2006 Trian’s only public proxy fight that went to a vote before DuPont
--Heinz fought Trian’s six-month pursuit of five board seats, turnaround plan
--Peltz and second dissident ultimately voted onto board
--3G Capital teamed up with Warren Buffett’s Berkshire Hathaway Inc. to acquire the ketchup maker in 2013 for $23 billion