Pepsi vs. Peltz: Activist Investor Won’t Give Up PEP Spin-Off Push

by Christopher Freeburn | February 20, 2014 10:03 am

Pepsi vs. Peltz: Activist Investor Won’t Give Up PEP Spin-Off Push

PepsiCo (PEP[1]) is facing increased pressure from an activist investor to divide its snack food and beverage units[2] into separate companies.

Pepsi on ice 630 300x225 Pepsi vs. Peltz: Activist Investor Won't Give Up PEP Spin Off Push[3]
Source: Flickr[4]

On Wednesday, Trian Fund Management, run by Nelson Peltz, sent a letter to PepsiCo’s board urging the company to separate the businesses. In the letter, Trian said that PepsiCo’s beverage unit would benefit from “focused leadership” and that restructuring PEP was the “best path forward” to boost shareholder value, the Associated Press notes.

The investment firm has been promoting the idea of separating the beverage and snack businesses since last year. In its letter, Trian predicted that the beverage unit would “thrive” if separated from the snack business.

PepsiCo has resisted calls to separate its snack and beverage businesses. On Wednesday, it issued a statement rejecting Trian’s proposals and insisting that the best way to increase shareholder value was to keep the company together, avoiding “costly distractions” that would negatively impact the interests of PEP stakeholders. Trian controls about $1.2 billion in PEP stock.

PEP shares climbed almost 1% in Thursday morning trading. Over the past twelve months, PepsiCo stock has gained about 2%.

Endnotes:
  1. PEP: http://studio-5.financialcontent.com/investplace/quote?Symbol=PEP
  2. divide its snack food and beverage units: http://www.latimes.com/business/la-fi-peltz-pepsi-20140220,0,4043601.story#axzz2tsEjfEKC
  3. [Image]: http://investorplace.com/wp-content/uploads/2011/09/Pepsi-on-ice-630.jpg
  4. Flickr: http://www.flickr.com/photos/sammy-naas/

Source URL: http://investorplace.com/2014/02/pepsi-vs-peltz-activist-investor-wont-give-pep-spin-push/
Short URL: http://invstplc.com/1mdNVkU