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By Svea Herbst-Bayliss
BOSTON, Jan 25 (Reuters) - Two and a half years ago Nelson
Peltz, the billionaire activist investor who often presents
himself as a partner with constructive advice for companies,
told an audience of pension and hedge funds that no one had a
monopoly on good ideas.
Sitting only a few feet away, nodding in agreement, was
Procter & Gamble Co Chief Executive David Taylor, who
ended one of the industry's most acrimonious corporate battles
by inviting Peltz onto P&G's board in 2018.
For nearly four years until Peltz' retirement from the P&G
board in August, the men traded ideas about how to woo new
customers to buy Tide detergent and Pampers diapers. Since Trian
first invested with P&G, the company's stock price nearly
doubled.
Now Peltz' Trian Fund Management has built a stake in P&G
rival Unilever Plc, the purveyor of Dove and Lifebuoy
soap, Hellmann's mayonnaise and Knorr bouillon, according to
several sources. Trian has declined to confirm the stake and
declined to comment for this story.
A half a dozen bankers and lawyers who have worked with
Peltz for roughly a decade and watched him operate at a number
of large companies expect he may soon bring the playbook that
worked at Cincinnati-based P&G to Unilever's London-based CEO
Alan Jope.
"It is not that Nelson Peltz has a deep grounding in soap,
but he knows his way around complex companies," said an advisor
who knows how Trian works but is not permitted to discuss the
private firm publicly. "His team can work backwards from an
income statement to understand what levers need to be pulled to
make a company better."
Unilever declined to comment.
At P&G, Trian criticized aging brands, a "suffocating
bureaucracy," short term thinking and sluggish shareholder
returns. Many of the same problems https://www.reuters.com/business/unilevers-soap-opera-ma-job-cuts-grumpy-investors-2022-01-25
exist at Unilever, where the share price has been roughly flat
for years. The company last week suffered a stinging rejection https://www.reuters.com/business/retail-consumer/unilever-offers-50-bln-pounds-gsk-unit-report-2022-01-15
when GlaxoSmithKline refused to sell it its consumer
health unit, bankers said.
Unilever has already taken some steps to cut costs by
consolidating its headquarters in London and getting rid of some
slower growing businesses like its Lipton tea brand. Unilever,
which employs about 149,000 people worldwide, on Tuesday said it
plans to cut about 1,500 management jobs https://www.reuters.com/business/retail-consumer/unilever-cut-1500-management-jobs-strategic-overhaul-2022-01-25
in a restructuring to create five product-focused divisions - a
revamp that echoes P&G's reshaping three years ago https://www.reuters.com/article/us-procter-gamble-strategy-idUKKCN1ND37M.
But bankers and analysts said there is more work ahead at
Unilever, such as winning in the digital marketplace and solving
for an insular culture in which many top executives, including
the CEO, have worked for decades. Unilever's sluggish sales that
have been largely blamed on the pandemic, coupled with a drop in
operating profits for the full 2021 year, leave room for
improvement, bankers said.
The half dozen people who have known how Trian operates said
the firm has shaped itself into an operational activist that
sticks around for many years to see the job through. It has
previously taken stakes in Mondelez and Pepsico as well as
General Electric, where it has been an investor since 2015.
Trian likes to present itself as an additional resource to
the board and often signals that it does not want to replace
others. But once inside the boardroom, two of the insiders also
said that Trian's voice often takes over and crowds out others.
Trian's army of analysts work relentlessly on producing
binders of information and data to help the board and management
think through new ways of doing things, the people said.
While investors and bankers said Trian may use a model for
what it wants done at a company, they also said there is little
fear of corporate secrets leaking because the principals, and
even the entire firm, tend to sign non-disclosure agreements to
ensure confidentiality.
The firm's team works largely out of the limelight and its
three founders rarely make public demands to fire the chief
executive as some other activists do, bankers and analysts said.
Trian's most recent public investments have been in mutual fund
companies Invesco and JanusHenderson.
(Reporting by Svea Herbst-Bayliss; Additional reporting by
Richa Naidu; editing by Vanessa O'Connell and Edward Tobin)
