Daniel Loeb's Third Point has built a stake in toothpaste maker Colgate-Palmolive Co, with the activist investor seeing value in a potential spin off of the Hill's Pet Nutrition business, CNBC reported Tuesday.

"Hill's could deliver even faster growth and better margins if it were a stand-alone business," Loeb says in a forthcoming investor letter, according to the report which cited sources. Colgate and Third Point did not immediately respond to Reuters' requests for comment.

Colgate-Palmolive shares rose 2.2% in morning trading.