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 GE is now Trian's largest investment with a beneficial ownership of
98.5 million shares, or a roughly 1 percent stake.
GE's shares rose 3 pct to $26.27 in premarket trading on Monday.
"Trian believes GE has significant long-term potential and that its
implied target value per share, including dividends, could be $40 to
$45 by the end of 2017 based on our view that GE can deliver EPS of
at least $2.20 in 2018," Trian Chief Investment Officer Ed Garden
said.
Over the past couple of years, Peltz has targeted DuPont and PepsiCo
Inc, among others, demanding board seats and asking for separation
of the companies' fast-growing businesses from stagnating ones.
Trian has not asked GE for a board seat, but has urged it to
increase cost cuts, consider selling more of its finance businesses
and be cautious on acquisitions.
Activist investors typically buy up shares of an undervalued company
and push for management or structural improvements, stock buybacks
or divestitures, among other things.
Peltz is one of the largest U.S. activist investors with $12 billion
in assets under management and callable commitments.
GE could return over 40 percent of its current market value to
shareholders by the end of 2018, Trian said in a report.
The fund recommended that GE explore more share buybacks and
consider joint ventures and initial public offerings to further
reduce the size of GE Capital's balance sheet over time.
GE is seeking to sell some $200 billion of its GE Capital assets as
it moves away from financial services and focuses more on
manufacturing.
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The company said on Monday it was on track to complete $100 billion
in GE Capital asset sales this year and achieve its raised
industrial operating earnings forecast for 2015.
GE raised its 2015 industrial operating earnings forecast in July to
$1.13-1.20 per share from $1.10-$1.20.
"GE maintains an open dialogue with our shareholders and enjoys
productive, collaborative relationships with them ... Trian has a
strong track record of working with companies to build long-term
shareholder value and has been an engaged shareholder," GE Chief
Executive Jeff Immelt said in a statement.
(Reporting by Supriya Kurane, Amrutha Gayathri and Ankit Ajmera in
Bengaluru; Editing by Anupama Dwivedi, Savio D'Souza and Kirti
Pandey)
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