Activist hedge fund takes a stake in Unilever as speculation swirls that it is becoming a takeover target
- Trian Partners has reportedly built up a position in the consumer goods giant
- The size of the stake has not been disclosed
- Trian’s arrival will ratchet up pressure on Unilever boss Alan Jope
An activist hedge fund has taken a stake in Unilever as speculation swirls that it is becoming a takeover target.
New York-based Trian Partners, run by billionaire Nelson Peltz, has reportedly built up a position in the consumer goods giant, which makes Dove soap and Hellmann’s mayonnaise.
However, the size of the stake has not been disclosed.
Takeover target?: New York-based Trian Partners, run by billionaire Nelson Peltz, has reportedly built up a position in Unilever
Trian has a reputation for demanding strategic and governance changes from companies it is involved in.
It also has experience in the consumer goods sector, having targeted Cadbury’s owner Mondelez and Proctor & Gamble.
Trian’s arrival will ratchet up pressure on Unilever boss Alan Jope, who was criticised following an abortive attempt to buy the consumer healthcare arm of pharma giant GlaxoSmithKline (GSK).
Revelations of the £50billion bid triggered a sharp drop in Unilever’s share price, which fell nearly 7 per cent last week, forcing Unilever to effectively abandon its pursuit.
Shareholder criticism continued to pile up and UK stock-picker Terry Smith – whose Fundsmith fund owns 0.8 per cent of Unilever – said he was ‘thankful’ that the bid was ‘dead’.
The fund manager added that the saga was a ‘near-death’ experience and raised questions over the quality of Unilever’s management.
Meanwhile, Bert Flossbach, the owner of investment group Flossbach von Storch, which holds a 1 per cent stake in Unilever, urged Jope to stick to improving performance rather than chasing costly deals. The speculation that Unilever itself could become a takeover target is providing an ironic twist to the saga.
Cranley McFarlane, of EF Tellsons Endeavour Fund, said: ‘What does it say about Unilever’s current outlook that management felt they needed such a large, transformative acquisition to improve it?’
He noted that it was not unusual for the firm to be a takeover target, with Unilever having fought off a private-equity backed bid by KraftHeinz in 2017.
‘After this episode, they could well become one again,’ McFarlane added.
Unilever’s leadership could also be in doubt following the flopped GSK bid, with Bernstein analyst Bruno Monteyne having questioned whether the incident would trigger a change in management.