The following is an excerpt from Ed Hammond and Beth Jinks | June 25, 2017 | Bloomberg.com |
Nestle SA is being targeted by activist investor Dan Loeb’s hedge fund Third Point, which has built a stake of more than $3.5 billion in the the world’s biggest food company.
Loeb owns about 40 million shares and some options in the Vevey, Switzerland-based company, according to an investor letter released Sunday after Bloomberg first reported the activist stake. The fund intends to encourage management to “pursue change with a greater sense of urgency” by selling its stake in L’Oreal SA, increasing leverage for share buybacks and reviewing its portfolio, among other suggestions.
“Despite having arguably the best positioned portfolio in the consumer packaged goods industry, Nestle shares have significantly underperformed most of their US and European consumer staples,” Third Point wrote in the letter. “It is rare to find a business of Nestle’s quality with so many avenues for improvement.”
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