After you have launched attacks at Sony and Yahoo, Third Point is an attack on Nestlé. The u.s. fund announced on Sunday the acquisition of a stake of over 1% in Nestlé and has prompted the food giant to improve its profit margin, to launch a share buyback program and disposing of non-strategic activities, including participation in L’oréal.
The participation, of a value of 3.28 billion swiss francs (3.02 billion euros) is the largest ever acquired by the investment fund, property investor Daniel Loeb. It would be the Third Point on the eighth shareholder of the giant of the food, according to Thomson Reuters data.
This participation comes as Mark Schneider, a defector of the group of the German healthcare Fresenius, attempts to revive growth of Nestlé, which he has headed since January. The swiss giant, is exposed to a slowdown in emerging markets, a drop in price in developed markets and new demands of consumers who want products that are more healthy and more fresh.
Doubling the debt, to redeem securities
Productive discussions have already taken place between the investor and the executive board of Nestlé, sued the hedge fund, who believes that Nestlé has set itself the goal official a margin of 18% to 20% by 2020 in order to improve the productivity.
Third Point, which announced the operation Sunday in a letter to its investors, calls for the sale of the 23% interest held by Nestlé in L’oréal. It also recommends that the Nestlé double, and beyond, its level of indebtedness, which, with the sale proceeds of the eventual participation in L’oréal, would provide the resources necessary for a redemption of securities.
Nestlé, that was not reachable in the immediate future, said this month that it was considering selling its business to american confectionery, which has an annual turnover of 900 million swiss francs (828 million euros). Conversely Gerber, manufacturer of baby foods, Nestlé, could make acquisitions and sign partnerships with innovative startups to boost its growth in its local market, the United States and China had said on Thursday to Reuters its director-general.
On Monday, the Stock market, as Nestlé has opened up 4.45%, while The l’oréal won 2,71%.
(with Reuters)
