Nestlé investor pushes for more sales, restructuring
According to Reuters, investor Daniel Loeb has stepped up pressure on Nestlé SA, in a letter that urged its board to be “sharper,” “bolder,” and “faster” in spinning off businesses and untangling its complex management structure.
According to Reuters, investor Daniel Loeb has stepped up pressure on Nestlé SA, in a letter that urged its board to be “sharper,” “bolder,” and “faster” in spinning off businesses and untangling its complex management structure.
“This is a call for urgency—rather than incrementalism,” said Loeb’s letter. It came with a 34-page presentation with recommendations and critiques. Third Point, the $18 billion hedge fund that has invested more than $3 billion in Nestlé, also launched website nestlenow.com to push its case.
Loeb’s letter, seen by Reuters, demanded that Nestlé spin off more businesses that do not fit its strategy including ice cream, frozen foods, and confectionary; divide itself internally into three divisions—beverages, nutrition, and grocery; and add an outsider to the board with expertise in the food and beverage business. Each division should have its own CEO, regional structure, and marketing heads, Loeb said.
In response to Loeb’s letter, Nestlé issued a press release on July 2 highlighting several measures it has taken in the last year to improve shareholder value, including its deals with Starbucks and Blue Bottle Coffee. “Through swift and decisive action, the company’s board and management are delivering results,” wrote Nestlé. “Nestlé has delivered strong total shareholder return over the long term (+135% total shareholder return in CHF over the past 10 years) and continues to focus on creating sustainable shareholder value … Nestlé’s board and management take all shareholders’ perspectives seriously and welcome their continued input.”