Unilever shares rally as Brooklyn Beckham’s billionaire father-in-law and activist investor Nelson Peltz joins consumer giant’s board
- Brooklyn Beckham’s ultra-wealthy father-in-law is joining the board of Unilever
- Unilever shares jumped over 7% after news of Peltz’s appointment emerged
Brooklyn Beckham’s billionaire father-in-law and activist investor Nelson Peltz is set to join the board of Unilever.
Peltz joins as non-executive director from July and will serve as a member of the board’s compensation committee, heaping pressure on the maker of Dove soap and Hellman’s mayonnaise as it reviews its strategy.
Unilever shares jumped 7 per cent to over 3,737.00p on news that Peltz has amassed a 1.5 per cent stake in the company.
Appointment: Nelson Peltz will join the board of Unilever as a non-executive director from July
Shares in Unilever have fallen well below their 2020 pandemic troughs this year and are still down 30 per cent from an all-time high reached in 2019.
The appointment of Peltz is likely to put pressure Unilever for a bigger revamp of its strategy, following its unsuccessful £50billion attempt to snap up GSK’s consumer healthcare arm earlier this year.
Peltz said in a statement today: ‘We look forward to working collaboratively with management and the board to help drive Unilever’s strategy, operations, sustainability, and shareholder value.’
Peltz, who is chief executive and founding partner of New York-based hedge fund Trian, is known for his interest in consumer-oriented firms and proposing operational changes at his portfolio companies.
Back in 2018, Trian called for a slew of changes at Unilever’s bigger rival P&G, with Peltz eventually joining its board following a months-long proxy fight.
‘We have held extensive and constructive discussions with him and the Trian team and believe that Nelson’s experience in the global consumer goods industry will be of value to Unilever,’ Unilever chair Nils Andersen, said.
Analysts at RBC and Credit Suisse welcomed Peltz’s appointment, saying he could effect positive changes to company culture and financial performance.
RBC analysts said: ‘If not that, at least the presence of an activist investor can drive collaboration amongst Unilever’s other shareholders and raise Unilever’s profile in the media to increase accountability of ongoing changes.’
Unilever said Trian Fund Management manages funds with interests in 37.4 million Unilever shares, or about 1.5 per cent of the group.
Fellow Unilever investor Waverton Investment Management welcomed Peltz’s addition to Unilever’s board.
‘Trian… can add fresh outsider ideas,’ Waverton fund manager Tineke Frikee, said.
Russ Mould, investment director at AJ Bell, added: ‘Unilever has given in to the pressure and handed activist investor Nelson Peltz a seat on its board.
‘The consumer goods firm has been struggling in the wake of the failed takeover of GSK Consumer Health and investors have welcomed the move warmly.
‘Inviting Peltz in is only likely to ramp up the pressure on beleaguered CEO Alan Jope and we may now see the company advance plans to streamline the business and address governance concerns.’
Unilever’s bumpy past six months
Unilever, the maker of Dove soap and Magnum ice cream has had a bumpy few years, with shares falling about a quarter from highs seen in late 2019 and chief executive Alan Jope’s plans facing scrutiny.
Here, experts at Reuters outline the key developments around Unilever in the past six months.
18 November 2021
Unilever agreed to sell its global tea business to CVC Capital Partners for 4.5 billion euros, concluding a process of reviewing and spinning off the division that had taken more than two years.
15 January 2022
GlaxoSmithKline said it had rejected a £50billion offer for its consumer goods business from Unilever. The offer ‘fundamentally undervalued’ the business, said GSK.
GSK said it had received a third approach from Unilever on 20 December and that the offer had comprised £41.7billion in cash and £8.3billion in Unilever shares.
Unilever confirmed that it had approached GSK about buying the business.
17 January 2022
Unilever signalled it would still pursue a deal for GSK’s consumer business, calling it a ‘strong strategic fit’, but its shares slid more than 8 per cent. The company also said it would announce an initiative later in the month to strengthen its business.
19 January 2022
Unilever said it would not raise its offer for GSK’s consumer healthcare business from 50 billion pounds, effectively abandoning its pursuit of the GSK business. Sources had told Reuters GSK would not engage with Unilever unless the offer were sweetened.
20 January 2022
Influential British fund manager Terry Smith criticised the failed bid as a ‘near death experience’ and urged Unilever to focus on strengthening performance.
23 January 2022
A source told Reuters that the hedge fund of activist investor Nelson Peltz, Trian Partners, had built a stake in Unilever, ratcheting up pressure on the company, months after Peltz had stepped down from the board of rival P&G.
24 January 2022
Unilever shares rose 6 per cent on reports of Peltz having acquired a stake in Unilever.
25 January 2022
Unilever unveiled plans to cut about 1,500 management jobs and reshape its business to focus on five main product areas as it tried to boost growth.
8 March 2022
Unilever became the first major European food company to stop imports into and exports from Russia after the country’s invasion of Ukraine.
28 April 2022
Unilever hikes prices by more than 8 per cent in the first quarter and warned more rises were on the way as it lifted its cost-inflation forecast for the second half of the year due to the Ukraine conflict.