| Trian Partners co-founder Nelson Peltz at the Delivering Alpha conference. (Photo credit: Heidi Gutman/CNBC) |
Nelson Peltz likes to tease — his investors, boards of directors and even attendees of the annual Delivering Alpha conference.
At last year’s conference — co-hosted by Institutional Investor and CNBC and held every year at the Pierre Hotel in Manhattan — Andrew Ross Sorkin said Peltz’s firm, New York-based Trian Partners, had acquired a stake in DuPont. However, when asked about it on the panel, Peltz, who co-founded the hedge fund firm, responded at the time: “You asked me in the green room about 10 minutes ago: ‘If you say DuPont, what comes to mind.’ Remember what I told you? I said: ‘Paint.’ That’s all you’re going to get today.”
Then in April, we reported that Trian established a new, large core position that accounted for 11 percent of net asset value, citing its first quarter letter dated April 28. The letter said that the position has “typical Trian attributes,” adding, “We believe the company has an attractive business model and secular tailwinds that could propel its already strong market shares.”
However, Trian did not get around to identifying the stock until June 30, when it finally disclosed it is Bank of New York Mellon Corp. So on Wednesday, at this year’s Delivering Alpha conference, it was not surprising to hear Peltz being a big tease once again.
For example, when Sorkin asked him about high-profile activist holding PepsiCo, Peltz said that over the past five or six months, he has met with 100 people, including the beverage giant’s top shareholders. However, he conceded he has not spoken with chairman and chief executive officer Indra Nooyi since February. Peltz then pointed out that during this intervening period, the stock has surged from $60 to $90 (it really went from $77 to $90).
In any case, he then teased the audience: “I urge you to watch this space. There will be action.” Sorkin asked what kind of action — perhaps a proxy fight?
“Maybe,” he said. “It’s a possibility.” That’s all we got on this.
Her then took all of the credit for the stock’s recent runup. “The reason it is at $90 is not earnings, or because it is taking market share or because it is doing better than Coke,” Peltz asserted. “We are there and shareholders are starting to agree with us.”
And when the conversation moved to DuPont, Peltz again was coy. He conceded that DuPont has done some good things, like instituting a huge buyback and spinning off its Performance Chemicals business.
But he stressed that the company is more of a complex conglomerate that missed guidance three years in a row. He says simpler businesses perform better.
But DuPont’s situation may change soon, he hinted. “We’re having a conversation,” he said at the conference. “We will know some time before the middle to the end of the summer whether these conversations have been constructive or not.”
Oh Nelson, you’re such a tease.
