UPDATE 2-Nelson Peltz reports stakes in Mondelez, PepsiCo; shares up

Fri Apr 19, 2013 5:41pm EDT

(Adds comments from analyst, investor, reported value of current stake)

April 19 (Reuters) - Nelson Peltz, the billionaire behind some of the most important deals in the global food industry, has acquired stakes in Mondelez International Inc and PepsiCo Inc, a regulatory filing on Friday showed.

The filing revived speculation that the activist investor would push to merge the snack giants as he did with Mondelez predecessors Kraft Foods and Cadbury. The news sent shares of Mondelez and PepsiCo higher.

The often speculated-upon marriage between PepsiCo and Mondelez would bring together salty snacks like Doritos and Tostitos with sweets like Cadbury chocolate and Oreo cookies. The resulting behemoth would have more than $100 billion in revenue and $20 billion of operating earnings.

As of Dec. 31, Peltz's Trian Fund Management LP owned 3.93 million shares of PepsiCo and 19.4 million shares of Mondelez, according to the filing. Based on Thursday's closing prices, the value of the combined holdings would be $903.9 million.

But Trian has since increased its holdings, according to the Wall Street Journal. Citing people familiar with the matter, the paper said on Friday that the stakes were worth $2.7 billion.

PepsiCo said on Friday that it has held meetings with Trian in recent weeks "to discuss and consider their ideas and initiatives."

"Trian is a respected investor, and we look forward to continuing constructive discussions with them," the company said in a statement. It did not comment on the nature of the ideas or discussions.

A Trian spokeswoman declined to comment.

Mondelez declined to comment on the Trian stake, but said it was focused on "leveraging its advantaged category mix, leading market positions and strong geographic footprint."

Shares of Mondelez, which used to be part of Kraft Foods until last year, closed up 5.3 percent at $31.69 on the Nasdaq, while PepsiCo closed up 1.9 percent at $82.77 on the New York Stock Exchange.

RICH HISTORY

In Friday's filing, which represented Trian's holdings at the end of last year, it said it had 19.4 million shares of Mondelez, representing a 1.09 percent stake, and about 3.9 million shares, or 0.25 percent, of PepsiCo.

"We don't know anything specific about what Mr. Peltz is up to ... but he has a history of helping value to rise to the surface, which we're a big fan of," said Kevin Dreyer, a portfolio manager at Gabelli Funds. Gabelli, based in Rye, New York, owns shares of both companies among its $36 billion in assets under management.

Peltz's influence was key in the spinoff of Dr Pepper Snapple Group from Cadbury, Kraft's purchase of Cadbury, and the subsequent breakup of Kraft into Mondelez and Kraft Foods Group Inc.

He is also a board member at H.J Heinz, which just agreed to be bought by 3G Capital and Berkshire Hathaway and has been active at Wendy's and Family Dollar Stores Inc.

PepsiCo undertook a big initiative last year to turn around its business, especially its North American drinks business which has lost market share to that of Coca-Cola. (Reporting by Martinne Geller in New York, Siddharth Cavale in Bangalore and Jessica Wohl in Chicago; Editing by Sreejiraj Eluvangal, Richard Chang and Tim Dobbyn)

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