August 7, 2015 Activist Ackman Not Indicating His Intent for Mondelez – TheStreet
Activist Ackman Not Indicating His Intent for Mondelez
NEW YORK (TheStreet) — William Ackman, the high profile activist investor, is not yet saying what he’ll do now that his hedge fund, Pershing Square Capital, has taken a $5.5 billion dollar stake in Mondelez International
Ackman owns 7.5% of the snack company whose products include Ritz crackers, Oreos and Trident gum. The Wall Street Journal has reported that Ackman believes
Mondelez must boost revenues more quickly, cut costs or sell out to another food company.
Bruce Goldfarb, President and CEO of Okapi Partners, a proxy solicitor which works on behalf of both activists and companies in proxy fights, says Ackman’s move is a sign of the times. “Activism is here to stay. Activists are going to take bigger, and bolder, positions in larger companies,” Goldfarb says.
Ackman is one of several big shareholders at Mondelez. According to Morningstar, other major Mondelez shareholders include Vanguard, Fidelity, and PowerShares QQQ ETF.
Goldfarb says when an investor takes a large stake in the company, part of the process involves understanding how other investors think and behave. “As Ackman reaches out to these other investors, expect differences of opinion,” Goldfarb says, “but there’s going to be a view that anything that can enhance value is welcome.”
Mondelez is no stranger to activist investors.
Financier Nelson Peltz, of Trian Fund Management, who holds a seat on the board of Mondelez, has been a driving force behind a plan at the company to cut about $3.5 billion in costs by the end of 2018.
Just last week, Mondelez reported its seventh consecutive drop in quarterly revenue.
While some critics of activists investors say they are only interested in short-term gains, Goldfarb disagrees.
“Activist investors, like Ackman, are deep, research-oriented investors,” Goldfarb says. “If there’s a belief that even a well-performing company can perform better, then there’s a potential opportunity.”