Building Block Associates

  • Home
  • Products & Solutions
    • View Supplies
    • What's In Season
    • Manage Mie Foodservice Manager
    • Foodservice Webinars
    • Become A Member
  • Online Store
  • Social Chat Blog
    • Foodservices News
  • Contact Us
  • Careers
  • Home
  • Products & Solutions
    • View Supplies
    • What's In Season
    • Manage Mie Foodservice Manager
    • Foodservice Webinars
    • Become A Member
  • Online Store
  • Social Chat Blog
    • Foodservices News
  • Contact Us
  • Careers

Daniel Loeb's hedge fund firm acquires a $3.5B stake in Nestle

6/28/2017

0 Comments

 
Picture
Billionaire activist investor Daniel Loeb’s Third Point hedge fund took its largest-ever initial bet on a public company, with a $3.5 billion stake in Nestle. Image: Nestle, Twitter
Billionaire activist investor Daniel Loeb’s Third Point hedge fund took its largest-ever initial bet on a public company, with a $3.5 billion stake in Nestle, or about 1.25% of the company's shares, according to The Wall Street Journal.

Also read, Candy companies commit to cut calories in half of their products by 2022.

The fact that consumer packaged goods companies are facing slowing growth leaves many players in the space vulnerable to activist intervention. Nestle is no different. As Third Point noted in the letter cited by The Wall Street Journal, Nestle has fallen behind its competitors who have done a better job adapting to changes in how people shop and competition from small, local brands. “Nestlé has remained stuck in its old ways,” the letter says.

“It is rare to find a business of Nestlé’s quality with so many avenues for improvement,” Third Point said in a letter to investors quoted by The Wall Street Journal. “Despite having arguably the best positioned portfolio in the consumer packaged goods industry, Nestlé shares have significantly underperformed most of their U.S. and European consumer staples peers on a three year, five year, and 10 year total shareholder return basis.”

A Nestle spokesperson said in an email to Food Dive that "
we keep an open dialogue with all of our shareholders and we remain committed to executing our strategy and creating long-term shareholder value. Beyond that, we have no specific comment."

Loeb suggested in his letter that the company work to improve margins, take on debt to fund a buyback and sell its stake in L’Oréal. Some investors also have called on the Swiss-based company to sell its frozen-foods operations — which includes Lean Cuisine and Hot Pockets — as consumers flock to fresher options. It appears that Loeb is not calling for an outright sale of the company, but sees areas where Nestle can make improvements to overall operations to increase shareholder value.

Some of those initiatives are already taking place by Ulf Mark Schneider, Nestle's CEO who took over in January. This could signify that Schneider and Loeb agree on many of the changes that need to take place, but the investor is pushing for them to happen sooner.

“We are convinced that Mark Schneider has very ambitious plans for Nestle, including some or all of Third Point’s proposals,” Jean-Philippe Bertschy, an analyst at Bank Vontobel AG, wrote in a note cited by Bloomberg. “Third Point’s move might be seen as hostile to Nestle, but could well be a great ally and accelerator for Mark Schneider in his strategic plan.”

Last week, Nestle announced it was the main investor in the $77 million round of new funding in Freshly, a meal kit startup. Nestle said would help the startup find new ways to deliver nutritious food to busy, on-the-go consumers. It also recently invested in an incubator program to support emerging food and agriculture startups. And earlier this month, Nestle said it is exploring strategic options for its U.S. confectionery business, including a potential sale, as the unit lags behind Hershey and Mars. 

It remains to be seen how active Loeb and Third Point will become in pushing for changes at Nestle. However, the investment is his largest-ever initial purchase in a publicly traded company, and the activist investor has a history of shaking up firms when he has gotten involved.

SOURCE Christopher Doering, Food Dive
0 Comments



Leave a Reply.

    Go to blog
    Advertisement

    RSS Feed

    News & Updates

    Stay informed with the latest news around foodservice, agriculture and other related food news.

    Do you Enjoy our E-news & Updates?
    Get our foodservice E-news, blogs and LTO's sent to your inbox, SUBSCRIBE HERE.

    Advertisement Opportunities 
    To get your foodservice business in our daily e-news, here.

    Archives

    March 2020
    January 2020
    December 2019
    November 2019
    October 2019
    September 2019
    August 2019
    July 2019
    June 2019
    May 2019
    April 2019
    March 2019
    February 2019
    January 2019
    December 2018
    November 2018
    October 2018
    September 2018
    August 2018
    July 2018
    June 2018
    May 2018
    April 2018
    March 2018
    February 2018
    January 2018
    December 2017
    November 2017
    October 2017
    September 2017
    August 2017
    July 2017
    June 2017
    May 2017
    April 2017
    March 2017
    February 2017
    January 2017
    December 2016
    November 2016
    October 2016
    September 2016
    August 2016
    July 2016
    June 2016
    May 2016
    April 2016
    March 2016
    February 2016
    January 2016
    December 2015
    November 2015
    October 2015

    Categories

    All
    Agriculture And Food Safety
    All Day Breakfast Menu
    Beans Benefits
    Beverage Company
    Building Construction
    Candy Company
    Carbonated Drinks
    Chicken Farm
    Dairy Production
    Fast Food
    Fast Food Chains
    Food Prices
    Generation Z
    Genetically Modified Organisms
    Gluten Free
    Grocery Retailer
    Healthy Meals For Kids
    Imported Foods
    Imported Foods From Other Countries
    Liquor Licence
    Milk Industry
    Milliennials
    National Food Holidays
    Nut Allergies
    Organic & Natural
    Processed Foods
    Produce Industry
    Restaurant
    Restaurant Management
    Restaurant Ordering System
    Restaurateurs
    Seafood
    Sustainable Resources
    Sweet Snacks
    Sweet Tasting Desserts
    Tree Nuts
    Value Menu Offering
    Ways To Reduce Food Waste

    Picture
    Advertisement
    Picture
Powered by Create your own unique website with customizable templates.