What’s Going On Here?News broke on Monday that Trian has been building up a stake in Unilever, and the activist investor is licking its lips at the prospect of breaking up the Ben & Jerry’s maker… What Does This Mean?Unilever’s been feeling the pressure to rethink its strategy for a while now, and last week’s failed bid for GlaxoSmithKline’s consumer health business only compounded investors’ worries. So Trian’s ready to show its hand: the activist investor – which buys a big enough stake in companies so it can bring about change from the inside – has reportedly been hoarding Unilever’s shares over the past few months. Analysts reckon it’ll use its substantial position to push the company into separating its lagging food segment from its much more successful household and personal care segment. That, Trian might be hoping, would give Unilever a much more streamlined focus, and hopefully drive up its share price. Why Should I Care?For markets: Trian’s been there, done that.
Investors sent Unilever’s stock up 7% on the news, which could be for a couple of reasons. For one thing, Trian’s got pedigree with consumer staples: the firm helped boost Procter & Gamble’s stock by 67% between 2017 and 2021. And for another, Unilever’s already in an enviable spot right now: it sells everyday essentials, which means it can pass higher costs onto its customers without losing them. Any improvements Trian brings to the table, then, are the icing on the cake.
The bigger picture: Activists are cornering Peloton too.
Activist investors are out in full force right now, with Blackwells Capital reportedly pressuring exercise equipment company Peloton to think about selling itself to Apple, Disney, or Nike. The company’s losing customers hand over fist as gyms reopen, after all, and its shares are languishing over 80% below their all-time highs. If the right buyer came along, though, it’d offer a premium on Peloton’s share price, which would go some way to offsetting its shareholders’ losses. | 