LONDON – In a widely anticipated move, the activist investor Nelson Peltz has become a non-executive director of Unilever, and a member of its compensation committee, sending Unilever’s shares up 7.5 percent to 37.58 pounds in early morning trading.
Peltz is the billionaire CEO and a founding partner of Trian Fund Management, an activist hedge fund. Unilever confirmed Tuesday that Trian has also taken a minority stake in the company.
According to British media reports, he began building up shares in Unilever earlier this year after the consumer giant’s botched attempt to purchase GlaxoSmithKline’s Consumer Health business, a move that irked shareholders, tarnished the image of CEO Alan Jope and saw Unilever’s share price collapse.
Although Unilever, parent of brands including Dove, Vaseline and Magnum, and Trian never actually confirmed that Peltz had become a shareholder, the markets were aware, and hoping that he’d join the board, as he did with Procter & Gamble a few years ago.
At one point, Unilever’s share price spiked 6 percent on reports that Trian had taken a stake in the company.
Peltz, who actively works with executives to help turn companies around, has also served on the boards of food and beverage conglomerates H.J. Heinz Company and Mondelēz International.
Unilever chair Nils Andersen said the company has held “extensive and constructive discussions” with Peltz and the Trian team, and believes that “Nelson’s experience in the global consumer goods industry will be of value to Unilever as we continue to drive the performance of our business. We look forward to working closely together to create long term sustainable value for our shareholders and wider stakeholders.”
Peltz, whose appointment is effective from July 20, said he was “delighted” to be joining the Board of Unilever.
“We believe it is a company with significant potential through leveraging its portfolio of strong consumer brands and its geographical footprint. Trian has made a considerable investment in Unilever. We look forward to working collaboratively with management and the board to help drive Unilever’s strategy, operations, sustainability, and shareholder value for the benefit of all stakeholders.”
On Tuesday, Trian said it manages funds that hold interests in approximately 37.4 million ordinary shares of Unilever, constituting approximately 1.5 percent of Unilever’s share capital.
James Edwardes Jones of RBC Europe said in a flash statement following the announcement that the news was positive for Unilever.
“We hope Peltz can stimulate positive changes to culture, remuneration and organizational structure like he did at P&G. If not that, at least the presence of an activist investor can drive collaboration amongst Unilever’s other shareholders and raise Unilever’s profile in the media to increase accountability of ongoing changes.”
Edwardes Jones added that at P&G, Peltz “stimulated changes to culture, remuneration and organizational structure. Although he isn’t completely responsible for the much-improved company P&G is today, he was a factor. We hope his presence can motivate similar changes at Unilever as well as drive cross-investor engagement. It should also raise the media profile of Unilever’s ongoing changes and drive accountability.”
Peltz served on the board of Procter & Gamble from 2018 until August 2021, working alongside the CEO and management, ultimately improving the conglomerate’s fortunes.
The British media reported earlier this year that Peltz and his team could easily take a similar approach at Unilever.
In February, Jefferies said that Trian’s investment in Unilever was likely to be “materially positive” for the Unilever shares as the fund has proven over time to be “notably well-informed analysts of their portfolio companies and ‘constructivist’ in approach.”
The bank speculated that Trian would likely push Unilever to make some quick brand disposals in the slow-growing foods business, or split the food and personal care divisions altogether, via a sale or a spin-off.
Both moves — not to mention having an activist investor breathing down management’s back — would pile even more pressure on Jope, who was ultimately responsible for the fumbled GSK bid.
Peltz is also the new father-in-law of Brooklyn Beckham.
His daughter Nicola, an actress and director, married Beckham earlier this year at the family’s Montserrel family estate in Palm Beach, Fla., with festivities, celebrity performances and a star-studded guest list. Nelson Peltz asked guests to make donations to Ukraine in lieu of wedding gifts.