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Peltz’s Activist Fund Trian Is Said to Build Stake in...

Business Maverick

Business Maverick

Peltz’s Activist Fund Trian Is Said to Build Stake in Unilever

Nelson Peltz in 2016. Photographer: Patrick T. Fallon/Bloomberg
By Bloomberg
24 Jan 2022 0

Nelson Peltz’s activist hedge fund Trian Fund Management has built a stake in Unilever Plc, according to people familiar with the matter, adding pressure on Chief Executive Officer Alan Jope after a failed bid to buy GlaxoSmithKline Plc’s consumer-health unit.

The U.S. fund has bought a meaningful stake in the Dove soap owner over the past few months, said the people, asking not to be identified because the plans are private. The exact size of the stake or Peltz’s intentions couldn’t be immediately learned.

Billionaire Peltz is turning his attention to Unilever after retiring from Procter & Gamble Co.’s board in August after nearly four years and several dramatic changes aimed at improving performance at the consumer-goods giant.

Unilever shares recorded their worst weekly loss since the peak of the pandemic selloff in March 2020 after it confirmed on Jan. 16 that it offered 50 billion pounds ($68 billion) for the healthcare unit, which includes brands such as Advil and Sensodyne. GSK rejected the bid as too low, and Unilever later said it had no plans to raise the offer.

CEO Jope’s public defeat came after analysts implored him not to pursue the Glaxo unit. Fund manager Terry Smith called the GSK bid a “near-death experience.” Only days earlier, he had urged Unilever to focus more on fixing its own business rather than seeking to promote the sustainability ethos of brands such as Hellmann’s mayonnaise.

Read More: Unilever CEO Misses Out on Advil Just as He May Need It (2)

The Financial Times earlier reported the Trian stake. Representatives for the hedge fund and Unilever declined to comment.

It remains to be seen whether Jope’s setback with GSK will prompt the kind of radical changes implemented at Unilever after Kraft Heinz Co.’s failed bid to acquire Unilever in 2017 for $143 billion. That debacle led Unilever to consolidate its headquarters in the U.K., ditch a cumbersome Anglo-Dutch structure, and adopt a more aggressive acquisition strategy.

Unilever shares could benefit from Peltz’s stake-building on Monday. Trian, which was co-founded by Peltz, Ed Garden and Peter May, has a history of pushing for changes at consumer companies, including PepsiCo Inc., Danone SA, Kraft Foods Inc. and others.

“Trian has a long and successful track record of unlocking value,” wrote Jefferies analysts led by Martin Deboo. He expects Trian to argue for splitting Unilever’s food business from hits household and personal care operations.

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