Tags: PepsiCo | Trian Fund | beverage | snack

PepsiCo Declines After Activist Trian Fund Eliminates Stake

Friday, 13 May 2016 05:21 PM

PepsiCo Inc. suffered its biggest intraday decline in more than two months after Nelson Peltz’s investment firm sold off its shares in the beverage-and-snack giant.

Peltz’s company, Trian Fund Management LP, indicated in a filing on Friday that it no longer holds a stake in PepsiCo. Trian had held 18.3 million shares, or 1.3 percent of the company, as of the end of last year.

Peltz had advocated for PepsiCo to break itself up, arguing that its snack and beverage businesses would be more valuable to shareholders as separate entities. He also blasted the company’s board for its ‘‘dismissive tone’’ and threatened to embark on a proxy fight. Though PepsiCo rejected his breakup proposal, it settled with the investor in January 2015 and added Trian adviser Bill Johnson to its board.

“PepsiCo has addressed many operational issues identified by Trian,” Anne Tarbell, a spokeswoman for the firm, said in an e-mail. “Management has increased productivity efforts, reduced overhead, increased advertising investment, and delivered consistent earnings growth on a constant-currency basis.”

The activist fund said it sold its stake in March at a significantly higher multiple than at the time of purchase.

PepsiCo spokesman Jon Banner said the company doesn’t comment on specific shareholders.

Share Reaction

Investors reacted negatively to PepsiCo losing a potential source of activist pressure. The stock fell as much as 2.4 percent to $103.54 in New York, marking its biggest intraday drop since Feb. 26. The shares had been up 6.2 percent this year before Friday.

PepsiCo Chief Executive Officer Indra Nooyi has long said that the snack and beverage divisions are more valuable to shareholders together. The company tightened the bonds between units in March by promoting executive Al Carey to a new position overseeing all three of its North American beverage and snack businesses.


 

 

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PepsiCo Inc. suffered its biggest intraday decline in more than two months after Nelson Peltz's investment firm sold off its shares in the beverage-and-snack giant.
PepsiCo, Trian Fund, beverage, snack
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2016-21-13
Friday, 13 May 2016 05:21 PM
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