Published: Mon, July 17, 2017
Sports | By Nelson Rowe

Activitst investor Nelson Peltz takes aim at Procter & Gamble

Activitst investor Nelson Peltz takes aim at Procter & Gamble

Peltz, an activist investor whose Trian Partners investment fund holds a $3.3 billion (R42.77 billion) stake in the USA producer of razors, laundry detergents, diapers and toothpaste, also wants the company to ward off threats to market share from smaller competitors. Trian won two seats on that board, including one for Mr. Peltz. Trian's previous battle with a consumer goods conglomerate was with PepsiCo Inc, where it pressured the company to spin off its beverage business from its snacks division, a campaign that the company never heeded though it did hand the investor a board seat in 2015 to make peace.

Still, Trian believes P&G has failed to move fast enough to arrest its market-share losses and convert cost cuts into profit, questioning the credibility of the company when it comes to carrying out promises. In contrast, the S&P 500 Household Products index .splrcprod , which includes Kimberly-Clark Corp and Clorox Co, has risen 12 percent over the same period. After a series of additional meetings, P&G declined the request, prompting Peltz to seek shareholder support at the company's annual meeting in October. P&G's quarterly organic sales, which excludes acquisitions and divestitures, has fallen just once during his one and half years at the helm. Since it started in 2005, it has only had two prior proxy fights - with H.J. Heinz Co. and DuPont Co. - and there were almost 10 years between them.

The consumer goods giant, whose products include Crest toothpaste and Gillette razors, has struggled in recent years to win over Wall Street analysts anxious by increased competition and declining market share, particularly in the United States.

Billionaire investor Nelson Peltz blamed Procter & Gamble for allowing online shave club rivals to gobble up Gillette's razor market share. "I like the man".

Peltz is not seeking a breakup of the company or a new CEO - for now - but says it wants to shake up PG's "slow-moving and insular" culture, according to Trian's SEC filing.

Trian also said P&G needs to cut costs and reduce corporate bureaucracy.

P&G, which reports quarterly results August 2, has shown slowing sales growth over the past five years and the company has lost market share across most of its categories, Trian said. P&G rejected naming Mr. Peltz to the board and said in a statement it "is confident that the changes being made are producing results".

Company executives have been implementing a strategy to sell off lower-selling brands and refocus P&G on its 65 top-selling labels, including Pampers and Tide.

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