FRANCE: Peltz investment talk buoys Danone shares
Shares in Danone rose today (7 November) after reports activist investor Nelson Peltz had acquired a stake in the French food giant.
Danone's shares were up almost 4% this morning following a report in The Financial Times that said Peltz's investment vehicle Trian Fund Management had bought 1% of the company.
The FT said Peltz wanted Danone to cut costs to boost margins by 100 basis points in the next three years.
Trian could not be reached for immediate comment. Speaking to just-food, Danone declined to comment on what it called "shareholder activity".
US billionaire Peltz often invests in FMCG companies he feels are under-valued or can improve their performance.
In the last six years, he has bought shares in the likes of Heinz, Kraft Foods and the then Cadbury Schweppes, companies he believed needed to change strategy. Peltz is often credited as the catalyst for the split of Cadbury Schweppes, which led to the creation of stand-alone confectionery firm Cadbury.
Sanford Bernstein analyst Andrew Wood insisted investors should not draw parallels between Cadbury and Danone.
He claimed Peltz's reported demand on costs was "not very aggressive" and said: "There does not seem to be any drive for a major overhaul of company strategy, a split-off of any business, or a push for a massive restructuring. We would agree: a structural change is not required at Danone, just improved execution in its dairy business.
"Overall, unlike with Cadbury, we do not consider that this announcement is a major event for Danone. However, we would still expect the stock to get a small boost from the very public interest and investment of a high profile and engaged investor in the stock."
Danone's shares were up 0.18% at EUR48.22 at 16:36 CET.
Then Kraft CEO, Irene Rosenfeld announced that the company wanted to broaden its position within the confectionery industry as a global leader. In 2010 Kraft’s offer of $19.5bn (£11.5bn) was accepted,...
- Deal or no deal: Frozen sale makes sense for Kerry
- On the money: How Greencore is outperforming
- Comment: Mondelez digital strategy suffers blow
- Shopper trends: Promos can mean higher prices
- JBS sees big opportunity from Primo Smallgoods
- Kerry puts frozen food unit on block - reports
- Coca-Cola eyes long-term rewards with dairy push
- Post issues warning over US cereal sector sales
- UPDATE: Greencore eyes US$1bn US business
- Abraaj outbids Kellogg with fresh Bisco Misr offer