Tags: nelson peltz | trian fund | ge | invest

Nelson Peltz's Trian Fund Takes $2.5 Billion Stake in GE

Monday, 05 Oct 2015 08:03 AM

Nelson Peltz's Trian Fund Management said it bought $2.5 billion in shares of General Electric Co. since May, making it one of the top 10 shareholders in the industrial conglomerate.

GE is now Trian's largest investment with a beneficial ownership of 98.5 million shares, or a roughly 1 percent stake.

GE's shares rose 3 pct to $26.27 in premarket trading on Monday.

"Trian believes GE has significant long-term potential and that its implied target value per share, including dividends, could be $40 to $45 by the end of 2017 based on our view that GE can deliver EPS of at least $2.20 in 2018," Trian Chief Investment Officer Ed Garden said.

Over the past couple of years, Peltz has targeted DuPont and PepsiCo Inc, among others, demanding board seats and asking for separation of the companies' fast-growing businesses from stagnating ones.

Trian has not asked GE for a board seat, but has urged it to increase cost cuts, consider selling more of its finance businesses and be cautious on acquisitions.

Activist investors typically buy up shares of an undervalued company and push for management or structural improvements, stock buybacks or divestitures, among other things.

Peltz is one of the largest U.S. activist investors with $12 billion in assets under management and callable commitments.

GE could return over 40 percent of its current market value to shareholders by the end of 2018, Trian said in a report.

The fund recommended that GE explore more share buybacks and consider joint ventures and initial public offerings to further reduce the size of GE Capital's balance sheet over time.

GE is seeking to sell some $200 billion of its GE Capital assets as it moves away from financial services and focuses more on manufacturing.

The company said on Monday it was on track to complete $100 billion in GE Capital asset sales this year and achieve its raised industrial operating earnings forecast for 2015.

GE raised its 2015 industrial operating earnings forecast in July to $1.13-1.20 per share from $1.10-$1.20.

"GE maintains an open dialog with our shareholders and enjoys productive, collaborative relationships with them ... Trian has a strong track record of working with companies to build long-term shareholder value and has been an engaged shareholder," GE Chief Executive Jeff Immelt said in a statement.


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Nelson Peltz's Trian Fund Management said it bought $2.5 billion in shares of General Electric since May, making it one of the top 10 shareholders in the industrial conglomerate.
nelson peltz, trian fund, ge, invest
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2015-03-05
Monday, 05 Oct 2015 08:03 AM
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