Nestlé: shares jump as activist investor takes stake.
(CercleFinance.com) - Shares in Swiss food giant Nestlé have risen by up to 4.
7% today, after activist investor Third Point announced that it had taken a 3.5 billion dollar stake and said that it would play a role to "pursue change."
Third Point - which currently owns roughly 40 million shares of Nestlé - said yesterday in a letter to investors that the maker of Kitkat bars and Nescafe coffee has significantly underperformed most of its US and European consumer staples peers over both three, five and ten years.
In the letter, Third Point insists it intends to play a "constructive role" to encourage management to pursue change, through: (1) improving productivity; (2) returning capital to shareholders; (3) re-shaping the portfolio; and, (4) monetising its L'Oréal stake.
Third Point - which reminds that Nestlé acquired 29% of L'Oréal in 1974 and sold 6% in 2014 - thinks the move was "a superb investment", but believes that the remaining 23% stake, which is equivalent to over 25 billion dollars, is not "strategic" any more.
The New York-based investment fund says it is also confident that Nestlé is prepared for change because of the company's wise decision last year to hire Ulf Mark Schneider as the new chief executive officer.
The Nestlé stock has risen by about 13% y-t-d as of last Friday. On Monday, shares are up another 4.7%, at 89 Swiss francs.
Copyright (c) 2017 CercleFinance.com. All rights reserved.
7% today, after activist investor Third Point announced that it had taken a 3.5 billion dollar stake and said that it would play a role to "pursue change."
Third Point - which currently owns roughly 40 million shares of Nestlé - said yesterday in a letter to investors that the maker of Kitkat bars and Nescafe coffee has significantly underperformed most of its US and European consumer staples peers over both three, five and ten years.
In the letter, Third Point insists it intends to play a "constructive role" to encourage management to pursue change, through: (1) improving productivity; (2) returning capital to shareholders; (3) re-shaping the portfolio; and, (4) monetising its L'Oréal stake.
Third Point - which reminds that Nestlé acquired 29% of L'Oréal in 1974 and sold 6% in 2014 - thinks the move was "a superb investment", but believes that the remaining 23% stake, which is equivalent to over 25 billion dollars, is not "strategic" any more.
The New York-based investment fund says it is also confident that Nestlé is prepared for change because of the company's wise decision last year to hire Ulf Mark Schneider as the new chief executive officer.
The Nestlé stock has risen by about 13% y-t-d as of last Friday. On Monday, shares are up another 4.7%, at 89 Swiss francs.
Copyright (c) 2017 CercleFinance.com. All rights reserved.