Nelson Peltz seems to have the Midas touch. When he buys a stake in a company, the shares tend to rise. He is an activist investor par excellence, and even when management doesn’t execute on his plans, investors feel more secure buying stocks in a company when Nelson Peltz has its back.
Peltz was behind the hugely successful spin off of Mondelez from Kraft, which created a 78% upside for Kraft. Now Peltz thinks Mondelez should change its name, but who knows if that’s going to happen.
Peltz bought a stake in Pepsico, and urged management to split the company up into a beverage and a snack division, but Pepsico said that the two businesses are just fine together, thank you very much. It kind of makes sense that salty snacks would go well with ice cold cola, even though cola sales are down globally.
Now Peltz is trying to convince Dupont to split itself up, and even if Dupont doesn’t, the stock has rose 4% on news that Peltz wanted to see a spinoff because of the company’s underperformance.
Peltz’s Trian fund owns a $1.6 billion stake in the company. Dupont noted that it has seen a 220% appreciation in its stock price since CEO Ellen Coleman took the helm. While Dupont seems to disagree with Peltz’s strategy, it seems to be, at least for now, a polite disagreement.
“Dupont welcomes open communication with shareholders and values input toward our common goal of enhancing shareholder value. We have had a constructive dialogue with Trian.”
Suntrust Robinson Humphrey analyst James Seehan thinks the relationship could be less than amicable. “I think it will take a long time for the two sides to agree on the right corporate strategy, and Trian could be involved in an extended proxy battle.”