Feb 20 Nelson Peltz has resumed his call to
break up PepsiCo Inc less than a week after the maker of
Pepsi-Cola and Lay's potato chips said it would not spin off
its North-American beverage business.
The snack and drink giant confirmed a Wall Street Journal
report that Peltz's Trian Fund Management LP sent a 37-page
letter to its board of directors on Wednesday.
Peltz has been urging PepsiCo to spin off the beverage
business and focus on its billion-dollar snack brands Lays,
Cheetos and Doritos.
PepsiCo, like rival Coca-Cola Co, has been battling
declining soda sales in developed markets, especially the United
States, as health-conscious consumers reach for non-carbonated
beverages such as juices and health drinks.
Wednesday's letter outlined why Trian still thinks PepsiCo
should spin off its beverage business, the Journal reported. ()
"PepsiCo's management and board of directors have spoken
clearly on this issue and are fully aligned with our strategy
outlined last week," a PepsiCo spokesman said in an email to
Trian, which says it owns about $1.2 billion in PepsiCo
stock, also informed the company that it will begin meeting with
shareholders "immediately" and might conduct public shareholder
forums as it tries to galvanize investor support for a split,
the newspaper reported.
Trian was not immediately available for comment outside
regular U.S. business hours.
PepsiCo, in its response to Trian's letter, said, "Our focus
is on delivering results for our shareholders, not new, costly
distractions that will harm shareholder interests."
Peltz had also urged PepsiCo to create a snack food giant by
acquiring Oreo cookie maker Mondelez International, but
dropped that push after winning a seat on the Mondelez board
Last week, after reporting a better-than-expected profit,
PepsiCo's Chief Executive Indra Nooyi said, "Decoupling our
beverage and snack businesses in North America would
significantly reduce our relevance to our customers."
The company had said its decision not to spin off the
business was taken after an exhaustive review that involved
external consultants and bankers.
"We are confident in our ability to deliver long-term
shareholder value as an integrated food and beverage company,"
PepsiCo said on Wednesday.