Shares in Unilever have surged today as investors welcomed the appointment of veteran activist Nelson Peltz to the board.
Peltz will join the Persil, Dove and Magnum maker as non-executive director on 20 July, as well as taking a place on the group’s compensation committee.
Unilever revealed the move as Peltz’s New York hedge fund Trian Partners confirmed it had built a sizable position in the consumer products group.
Trian’s 1.5% stake – which analysts estimated to be worth $1.6bn (£1.3bn) – meant the fund is now one of Unilever’s top five largest shareholders behind BlackRock, Vanguard and Legal and General.
Shares in Unilever soared 7% as markets opened this morning and finished the day 9% higher at 3,825p .
Peltz said he was “delighted” to be joining the board of Unilever.
“We believe it is a company with significant potential, through leveraging its portfolio of strong consumer brands and its geographical footprint.
“Trian has made a considerable investment in Unilever. We look forward to working collaboratively with management and the board to help drive Unilever’s strategy, operations, sustainability, and shareholder value for the benefit of all stakeholders.”
Peltz is a well-known as an activist in the fmcg industry, taking seats on the boards of Procter & Gamble, Mondelez and Heinz.
The Financial Times first revealed Peltz had taken an interest in Unilever in January after the group was forced to abandon a £50bn pursuit of the consumer health division of GlaxoSmithKline.
However, the size of Train’s position was unknown, and investors and analysts grew impatient in the following months at the lack of confirmation of the hedge fund’s involvement.
Shares in the group declined further as Unilever revealed, during its annual results presentation in February, that margins were being squeezed as input cost inflation continued to soar.
Unilever, and its boss Alan Jope, has come under increasing pressure following a sustained period of underperformance relative to rivals such as Nestle.
Jope faced fierce criticism earlier this year from vocal investor Terry Smith for its perceived focus on putting sustainability issues ahead of financial performance and the management team was widely derided for its handling of the GSK bid.
The stock price tumbled from highs of 5,196p in the summer of 2019, the year Jope joined as CEO, to lows of 3,386.5p in March this year – representing a 53% slump in value and a £46.2bn fall in the market cap to £86.4bn.
Unilever chairman Nils Anderson said today he was pleased to welcome Peltz to the board.
“We have held extensive and constructive discussions with him and the Trian team and believe that Nelson’s experience in the global consumer goods industry will be of value to Unilever as we continue to drive the performance of our business,” he added.
“We look forward to working closely together to create long-term sustainable value for our shareholders and wider stakeholders.”
Bernstein analyst Bruno Monteyne said Peltz brought a “huge amount of credibility” to Unilever.
And AJ Bell investment director Russ Mould added the appointment is likely to ramp up the pressure on the “beleaguered” CEO.
No comments yet