|
Loeb's Third Point hedge fund revealed a $3.5 billion stake in
Nestle on June 25, making it the eighth-largest shareholder,
urging the world's largest packaged food maker to more
aggressively improve returns.
Three days later, Nestle addressed some of the New York-based
fund's points with a 20 billion Swiss franc ($21 billion) share
buyback coupled with a plan to increase leverage and prioritize
acquisitions in some high-growth areas.
Loeb met Nestle CEO Mark Schneider on June 2, the source said on
Monday, adding that no other meetings were currently planned
before a Sept. 26 investor seminar by the Swiss maker of
Nescafe, Perrier and Gerber baby food.
Third Point generally agrees with the direction Nestle is
heading in under Schneider, the first outside CEO in nearly a
century, said the source, who declined to be identified.
But it wants to see the company act with greater urgency,
including by setting a margin growth target like peers including
Unilever <ULVR.L> and Danone <DANO.PA> have recently done.
Loeb's Ultra fund, which is invested in Nestle, is doing well
this year. It gained 0.9 percent in June, taking its
year-to-date performance to 17.2 percent, said the source.
Nestle has not publicly addressed Loeb's call for it to sell its
23 percent stake in French cosmetics giant L'Oreal <OREP.PA>,
which is worth about 23 billion euros ($26 billion).
But behind closed doors, Nestle's board does not seem keen to
divest the stake, which it has owned for more than four decades,
the source said, confirming what other sources have previously
told Reuters.
Third Point, which has not yet commented publicly on Nestle's
plans, may give an update in its quarterly letter to
shareholders due later this month, the source said, adding that
its current plan of campaign was to keep sharing its views and
talking to the company.
Last month, Third Point said that it owned roughly 40 million
Nestle shares in its funds and a special purpose vehicle raised
especially for the move on the company.
It started buying Nestle shares earlier this year when the stock
was trading above 70 Swiss francs per share, the source said.
The shares jumped 4 percent to a record high the day Third
Point's letter was disclosed, but have since pared much of those
gains. The stock was trading at 83.05 francs per share at 1012
GMT on Monday, up 1.5 percent.
(Editing by Alexander Smith)
[© 2017 Thomson Reuters. All rights
reserved.] Copyright 2017 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.
 |
|
