Nestle faces pressure from activist investor | Progresiv
Nestlé has come under new pressure after activist investor Daniel Loeb’s Third Point hedge fund declared that it had picked up a 1.3% stake in the group. 
The stake, worth 3.28bn Swiss francs, is the largest ever taken by Third Point in any company and reportedly makes the hedge fund the eighth-largest shareholder in Nestlé. Third Point wrote to its investors declaring the stake, adding that it has already had productive conversations with Nestlé management.
The letter said Nestlé “will need to articulate a decisive and bold action plan that addresses the staid culture and tendency towards incrementalism that has typified the company’s prior leadership and resulted in its long-term underperformance”.
The hedge fund has called on the Swiss giant to improve its margins, buy back shares, and sell off non-core businesses. Amongst its demands is the setting of a formal target of achieving margins of 18%-20% by 2020, the sale of the 23% stake in L’Oreal (possibly “via an exchange offer for Nestle shares), and taking on additional debt to generate funds and buy back shares. The Swiss group has so far declined to comment on the move, or the fund’s demands. (www.kamcity.com)
