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March 6, 2006

US: ‘Activist-investor’ increases pressure on Heinz

HJ Heinz has confirmed that billionaire investor Nelson Peltz has given notice that, through Trian Partners Master Fund, he intends to seek the nomination of five people to Heinz’s 12-member board of directors.

HJ Heinz has confirmed that billionaire investor Nelson Peltz has given notice that, through Trian Partners Master Fund, he intends to seek the nomination of five people to Heinz’s 12-member board of directors.

“We have received notice from Trian Partners Master Fund that Peltz intends to nominate himself and four other individuals to the board of directors,” Debbie Foster, Heinz spokesperson, told just-food.

Trian Partners gave notice of its intention ahead of Saturday’s (4 March) deadline. The other Trian nominees include Greg Norman, Peter May, Edward Garden and Michael Weinstein.

Peltz is chairman, chief executive and controlling investor of Arby’s fastfood chain owner Triarc Cos and chief executive of Trian Fund Management. He has previously successfully pressured various food service companies into restructuring measures that have resulted in increased shareholder pay-outs.

“It’s been done before,” Foster explained. “He did the same thing with Wendy’s fastfood chain. Nevertheless, Heinz remains committed to returning value to its shareholders.”

Heinz has already streamlined its portfolio, with management highlighting in its quarterly earnings report and the statement acknowledging Peltz’s nomination to the board, released earlier this week, that it was increasing focus on leading brands and core categories to maximise shareholder value.

“We see this shareholder activism as a shot across the bow, however, and as impetus for the management to accelerate its plans for restructuring and returning cash to shareholders,” Merrill Lynch analyst Leonard Teitelbaum wrote in a note earlier this week.

The company said it has returned more than US$1bn to shareholders through dividends and share buybacks in the last year and has generated $3bn in cash flow from operations over the last three years.

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