Unilever roars back to life as billionaire activist hedge fund boss Nelson Peltz grabs stake
Unilever shares roared back to life as investors welcomed an activist hedge fund taking a stake in the company.
Shares in the Hellmann’s and Marmite maker jumped 7.3 per cent, or 268.5p, to 3943.5p.
The FTSE 100 giant’s value swung back above £100billion for the first time since its failed takeover of Glaxosmithkline’s consumer health arm.
Billionaire Nelson Peltz (pictured) was revealed to have built a stake in Unilever through his New York-based hedge fund Trian Partners
The rise came after billionaire investor Nelson Peltz was revealed to have built a stake in the company through his New York-based hedge fund Trian Partners.
It is unknown how big a stake Trian has built, but it usually takes positions of between 1 per cent and 3.5 per cent.
That would make the asset management firm one of Unilever’s five biggest shareholders.
It is believed the £6.3billion hedge fund started buying shares before Unilever’s bids for GSK consumer health were revealed.
But analysts said it would pile further pressure on Unilever chief executive Alan Jope, whose leadership was questioned over the failed £50billion takeover attempt.
Jefferies analyst Martin Deboo said Trian’s involvement will ‘increase the pressure’ on Jope and the board.
Unilever’s shares crashed as much as 10 per cent last week as analysts and investors roundly rejected the deal.
Two major Unilever shareholders publicly questioned Jope’s leadership over the GSK approach.
Terry Smith – whose Fundsmith fund owns 0.8 per cent of Unilever – called the saga a ‘near death’ experience and raised questions over the quality of Unilever’s management.
Smith said Unilever bosses – ‘or someone else if they don’t want the job’ – should focus on fixing the existing business before looking to buy others.
And investment manager Flossbach von Storch, which owns 1 per cent of the company, also urged Jope to stick to improving performance rather than chasing costly deals. Jope has also been heavily criticised for Unilever’s sales and share price growth.
Trian is renowned for pushing strategic and governance changes at companies it is involved in and its involvement helped shares claw back last week’s losses.
Deboo said the hedge fund has a ‘long and successful track record’ of unlocking value at companies through splits and spin outs.