Tue, Jan 25, 2022 page10

• Activist investor Peltz adds to Unilever CEO’s woes

  • Bloomberg
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  A stake that Nelson Peltz’s activist hedge fund has built in Unilever PLC is adding to pressure on the Dove soap maker’s CEO Alan Jope, after Jope’s failed bid to buy a consumer-health unit from GlaxoSmithKline PLC.

  Peltz’s Trian Fund Management has bought a significant stake in London-based Unilever over the past few months, according to people familiar with the matter, who asked not to be identified because the plans are private.

  The size of the stake or Peltz’s intentions could not be immediately learned.

  

  Trian Fund Management founding partner Nelson Peltz speaks at a conference in Laguna Beach, California, on Oct. 25, 2016.

  Photo: Reuters

  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.

  The emergence of an activist investor is the latest challenge for Jope, who is reeling from the failed GSK purchase and faces growing pressure to deliver a new strategy.

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

  “The fox would now appear to be inside the henhouse,” Jefferies analysts led by Martin Deboo wrote on Sunday. “The force and temperature of debate around Unilever now look set to rise by several notches.”

  Trian is expected to argue for splitting Unilever’s food business from its household and personal care operations, Deboo wrote, and “further increase the pressure” on Jope and the board.

  Unilever shares recorded their worst weekly loss since the peak of the pandemic sell-off in March 2020, after it confirmed on Sunday last week that it offered ￡50 billion (US$67.7 billion) for the GSK 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.

  GSK has its own activist investor in the mix, with Elliott Investment Management Corp pushing for changes.

  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, Smith 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.

  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 US$143 billion. That situation led Unilever to consolidate its headquarters in the UK, ditch a cumbersome Anglo-Dutch structure and adopt a more aggressive acquisition strategy.
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