Blog: Dean BestCould proxy fight hit PepsiCo?

Dean Best | 17 July 2014

Nelson Peltz is not letting go. The US billionaire investor is continuing in his quest to get PepsiCo to split in two - and has reportedly suggested a proxy battle with the company could be on the horizon.

Peltz wants PepsiCo to divide its snack business from its drinks unit but, despite his public criticism of the company's performance, the Lay's crisps maker is remained steadfast in its commitment to its model.

Yesterday, Peltz made his latest pronouncements on the situation at a conference in New York convened by CNBC.

According to the news channel, Peltz said he "most definitely" wants PepsiCo to split in two and that there "could be" a proxy battle. "We have definitely not disappeared from the scene," Peltz said.

"Over the last five or six months, we've met with about 100 of the top shareholders of Pepsi. The stock has moved up dramatically. It hasn't moved up because of earnings. They had a big reset a couple of years ago and they haven't even got to the guidance they gave in '12. The company is not being managed well."

Peltz insisted PepsiCo's shares had risen because Trian's "message is resonating with the shareholders of Pepsi". He said: "And I urge you to watch this space and see what happens."

Asked to clarify, Peltz said: "There will be action." Pressed if there could be a proxy battle, the investor replied: "Could be", although when questioned if Trian would pursue a battle, he added: "No, you're hearing me answer a question that [a proxy fight] is a possibility.

The fact Peltz is still hammering away at PepsiCo over a year after first suggesting the company split in two (at that time he was calling for PepsiCo to merge with Mondelez and spin off the drinks division) indicates the investor still believes he could win enough shareholder support to put pressure on the board.

In February, analysts at Sanford Bernstein last month published a survey of 100 PepsiCo investors. Some 55% of the shareholders surveyed said the company should split.

Nevertheless, PepsiCo has so far stood firm. Weeks after that survey - and in the wake of comments from Peltz for the company to use more than "platitudes and rhetoric" to defend its position - PepsiCo insisted "sustained value creation" for its shareholders was "best optimised as an integrated food and beverage company".

Peltz, however, is not going away.

Sectors: Cereal, Dairy, Snacks

Companies: PepsiCo


Woolworths pushes healthy eating with free fruit for kids

As global focus centres on childhood obesity and food-related illnesses, Australian retailer Woolworths Ltd has devised one way to get children to reach for a healthier snack over junk: give it to the...


Osborne overplays Britishness of United Biscuits

That politicians are selective with the truth is pretty much a given. But it did make this pundit chuckle to hear UK Chancellor George Osborne describe United Biscuits as a "great British company"... ...


Globally, consumers are dining out again, says NPD Group

Researchers at US-based The NPD Group have expressed optimism in the prospects for the foodservice sector after analysing sales data in 11 markets this summer....

just-food homepage

Forgot your password?