In the build-up to the group’s AGM in August, the boardroom battle at US food company HJ Heinz is hotting up. Yesterday (10 July) the company filed its definitive proxy statement with the Securities and Exchange Commission, urging shareholders to re-elect the current board of directors and reject the nominees of Nelson Peltz and the Trian Group which itself has contacted shareholders with its formal proposals.

A letter to shareholders, co-signed by Heinz chairman, president and CEO William R. Johnson and presiding director Thomas J. Usher, reads: “We believe that electing Mr Peltz or any of his hand-picked nominees is not simply a matter of adding a ‘new voice’ to the Heinz Board – it is incurring the risk of electing a self-interested voting bloc that would destroy shareholder value, not enhance it.”

The letter says that shareholders can “rest assured that the eleven independent directors on the Heinz board will remain fully focused on holding management directly accountable for increasing shareholder value and improving performance”. It also detailed Usher’s precise role, stating that he presides over all executive sessions of the independent directors and serves as the contact director for shareholders in addition to leading the board and committee evaluation process.

Heinz added that the company is on track this fiscal year to deliver Superior Value and Growth, and is “meeting or exceeding our key growth and business metrics as we approach the end of the first quarter”.

While stressing the strong track record of the current board, Heinz said it believes the Trian plan to be “poorly conceived, unrealistic and superficial”. It also said that Heinz’s board has unanimously determined that the Trian nominees do not meet corporate governance standards, as each is an employee, relative or close personal friend of Nelson Peltz and in the company’s view could be expected to vote as a bloc rather than participate in deliberative discussions as independent directors.

Meanwhile, the Trian Group itself announced that it has sent a letter to Heinz shareholders highlighting Heinz’s “plummeting stock price under the company’s current chairman, president and CEO William R. Johnson, and his serial restructuring plans that have reduced earnings per share during Johnson’s eight-year tenure”.

Trian urges Heinz shareholders to “protect their investment in Heinz and let their voices be heard” by electing the Trian Group’s five nominees to the Heinz board at the AGM on 16 August.

“The Trian Group is HJ Heinz’s second largest shareholder, owning approximately 5.5% of the company’s outstanding shares,” Trian says in its letter to shareholders. “We invested in Heinz because we believe it is a valuable franchise, with an exceptional group of “power” brands that has, unfortunately, been very poorly managed under its current chairman, president and chief executive officer William R Johnson. We are deeply troubled by Heinz’s continued failure to deliver on its promises to shareholders but we are confident that, with the right direction, Heinz’s downward spiral can be reversed.”

Trian said that Heinz’s stock price has plummeted from $54.50 on 30 April, 1998 to $33.70 on 6 February, 2006, a decline of more than 38%. “Over the same period, Heinz has been ‘restructured’ five different times and earnings per share have fallen 12% from $2.15 per share to $1.89,” the letter continued. “Astoundingly, Heinz has recently announced its sixth ‘restructuring’ in just nine years. Because of Heinz’s dismal performance record and lack of management credibility and accountability, we have nominated five highly qualified, independent and experienced individuals to represent all shareholder interests on the Heinz Board of Directors. It is time for Heinz to allow shareholders to have a voice.”