Published: Mon, July 17, 2017
Sport | By Wendy Sparks

Peltz Launches Proxy Fight with Procter & Gamble

Peltz Launches Proxy Fight with Procter & Gamble

Investor Nelson Peltz is planning to launch a bid for a board seat at consumer goods giant Procter & Gamble (P&G), people familiar with the matter have told the Wall Street Journal.

Peltz's Trian Fund Management is a key shareholder in P&G, with roughly $US3.3 billion of stock. P.&G.is increasing its online presence and has fought back with price cuts, but its stock price has lagged competitors' and the Standard & Poor's 500 index in the a year ago, and - as Mr. Peltz points out - over the last decade.

P&G has increased operating profit margins, to 20.6% previous year from 19.1% in 2011, and says it ranks third in the industry - behind competitors that also charge high premiums. The firm's campaign website (revitalizepg.com) and press release has few immediate changes proposed for the company other than advocating for a geographic organizational structure that it believes will empower divisional leaders to make faster and better decisions.Shares of P&G were up slightly at $87.72 in afternoon trade. It seeks a board seat at almost all of its companies so that it can tap the "perfect information" only insiders have and can change the discussion about what is working and what isn't.

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However, it does want to bring change to the company, which includes cutting cost and management.

For instance, Peltz acknowledged during a CNBC interview that P&G is a "great company" that's backed by a "phenomenal" CEO David Taylor who hasn't yet lived up to his full potential. Shares of rival Johnson & Johnson are up 15 percent in the same period, Colgate-Palmolive Co.is up 11 percent and Kimberly-Clark Corp.is up 9 percent. P&G's quarterly organic sales, which excludes acquisitions and divestitures, has fallen just once during his one and half years at the helm.

US consumer products giant Procter & Gamble (PG) Monday became the target of potentially the largest-ever proxy fight.

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In reiterating its Hold rating on the shares, DB says PG "has missed a number of big industry changes over the last several years, notably share losses in USA men's shaving and China broadly, but we believe management is now more focused than ever to bring superior innovation to the market to drive share gains". "I like the man".

P&G has said changes introduced from late 2015 will save $US10 billion in annual expenses by 2021, and has cut 24,000 jobs since 2012. P&G rejected naming Mr. Peltz to the board and said in a statement it "is confident that the changes being made are producing results". Peltz's first move as director would be to reinstate the board member he displaces.

Company executives have been implementing a strategy to sell off lower-selling brands and refocus P&G on its 65 top-selling labels, including Pampers and Tide.

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