Procter & Gamble Co (NYSE:PG) stock was up on Wednesday following news of an investment by Trian Fund Management.
The investment from Trian has it taking a $3.5 billion stake in Procter & Gamble Co. It is likely that Trian is interested in reducing the size of the company. PG has already been working on this and sold 41 of its brands last year.
The $3.5 billion stake in Procter & Gamble Co is the largest that Trian has ever taken out. Its decision to invest in Procter & Gamble Co lines up with its focus on consumer brand companies. It’s strategies include investing in companies to gain board seats so that it can reduce expenses and increase revenue.
Trian may push for board seats at Procter & Gamble now that it has such a large investment in the company. PG has until June 13 to nominate more members to its board and it’s likely that Trian will be looking to negotiate for some of those seats, reports Reuters.
Trian’s $3.5 billion stake in Procter & Gamble Co comes to roughly 6.42 million shares. While the activist investor will likely try to slim the company down, it may meet resistance. PG’s last earnings report saw it beat out Wall Street’s earnings per share and revenue estimates for that quarter. This may give it a strong position to argue against further slimming of the company.
“P&G welcomes investment in our company,” Damon Jones, a Procter & Gamble Co spokesman, told Reuters. “We will continue to do what we always do.”
PG stock was up 3% as of noon Wednesday.