Procter & Gamble faces board seat fight from Trian Fund Management

Cornelia Mascio
Luglio 17, 2017

Nelson Peltz's hedge fund is waging a proxy fight against the consumer products giant, demanding a seat on the board, in an effort to jump start lagging sales and profit growth.

Trian says PG last week rejected its demand to name Peltz a director, which Deutsche Bank sees as "a sign that management is confident in its strategy and is unlikely to miss expectations over at least the next few months". "Trian believes P&G must take decisive action that goes above and beyond what P&G has presently committed to do".

Peltz's investment firm, which owns $3.3 billion shares of P&G, filed a preliminary proxy statement with the Securities and Exchange Commission to initiate the process.

"P&G's board and management team are keenly focused on executing the company's strategy to drive innovation, accelerate organic sales and volume growth, improve productivity and cost structure, and strengthen P&G's organization and culture". "The company must act with the greatest possible urgency to address the market share it is losing to both its peers and smaller local competitors, who are adapting to industry changes more effectively than P&G". Last week, P&G officially declined to give Peltz a seat on the board.

The consumer goods giant, whose products include Crest toothpaste and Gillette razors, has struggled in recent years to win over Wall Street analysts anxious by increased competition and declining market share, particularly in the United States.

Because of P&G's size, Trian's ability to win support from other investors will be in a particularly bright spotlight, and it. Once the company's largest investor with a 1% stake, Ackman sold off the last of that investment in May 2014.

Trian and Procter & Gamble Co were close to reaching an agreement that would allow Peltz to join the Board if public goals weren't met, but the discussions fell apart in May.

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