Bill Ackman, the activist hedge fund manager, has put a $5.5 billion bet on Mondelez (7.5 per cent stake), the maker of Oreo, Cadbury’s chocolate and Trident gum, in an attempt to force the food group to slash costs or put itself for sale.
The story was first reported by the Wall Street Journal.
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This is the second time in three years that US-based Mondelez, which has a market capitalisation of $73bn, has had to argeu with an investor activist, following turbulence by Nelson Peltz who tried to force the company to merge with PepsiCo’s snacks arm.
Mr Ackman and his fund, Pershing Square, holds 3 per cent of Mondelez shares directly, with the remaining interest through futures contracts and options.
Mondelez respond: “We welcome Pershing Square as investors in our company. We’ll continue to focus on executing our strategy and on delivering value for all our shareholders”.
Mr Ackman knows both Irene Rosenfeld, Mondelez chief executive, and 3G Capital well, putting him in a unique position to play them off against each other, claim the ficancial Times.
Pershing Square was an investor in Cadbury when Kraft launched a hostile bid for the chocolate maker in 2009 and Ms Rosenfeld, then chief executive of Kraft, stoked controversy in the UK by backing away from an apparent promise not to close Cadbury factories, according to ficancial Times.
The hedge fund is also an investor with 3G in Burger King, another food company where the Brazilian firm has installed management to impose cost cutting and zero-based budgeting.
Mr Peltz dropped his demand for the Pepsi merger last year to focus on pushing for cost cuts and Mondelez gave him a seat on its board.
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