| March 13
March 13 Activist investor Nelson Peltz, who has
been pushing PepsiCo Inc to separate its beverage and
snacks businesses, blasted the company yet again on Thursday and
demanded answers on operational issues and its corporate
Peltz's Trian Fund Management, which owns nearly 1 percent
of PepsiCo's stock, has been urging the company to split its
flourishing snacks division from its sluggish beverage business
to create "two leaner and more entrepreneurial companies."
Peltz, in a letter to PepsiCo's board on Thursday, demanded
the company give details about its expenses and provide volume
growth and market share data for all its beverage categories in
He also called for a meeting of shareholders and board
members without the presence of PepsiCo's management.
In an email response to Peltz's latest letter, PepsiCo said
two of its board members had already met with Trian without
management present. "The board has thoroughly reviewed Trian's
proposals and has concluded that they would not maximize
shareholder value," PepsiCo said.
The company, known for beverages like Pepsi, Tropicana and
Gatorade, also sells snacks such as Lays, Cheetos and Doritos
chips, among others.
PepsiCo, like rival Coca-Cola Co, has been battling
declining soda sales in developed markets, especially the United
States, as health-conscious consumers switch to non-carbonated
beverages such as juices and health drinks.
Peltz, in his latest letter, also asked PepsiCo to outline
plans for its bottling operations, which have been a drag on the
"Last fall, management told us that the acquisitions were 'a
mistake' and the bottling system was 'in disarray' when the
bottlers were acquired, yet we believe the system is operating
far less efficiently today," Peltz wrote.
He asked PepsiCo to explain why it believed spending $240
million on renovating its headquarters was better than investing
in raising its bottling capacity and launching more package
sizes to compete better with Coca-Cola.
" ... In a recent phone conversation, CEO Indra Nooyi
acknowledged that PepsiCo is indeed behind Coke in alternative
package sizes but argued that catching up would require
significant capital investment," Peltz wrote.
He urged the company to cut costs by reducing the number of
its headquarters to two from four and invest the savings in
price, marketing, innovation and packaging.
Peltz criticized PepsiCo Presiding Director Ian Cook's
response to his earlier letter sent in February.
"The dismissive tone of his letter suggests that you do not
appreciate the degree to which PepsiCo's shareholders are
frustrated," Peltz wrote on Thursday.
Cook, in his response late in February, reiterated PepsiCo's
stance that its board and management were "comfortable" and in
"complete alignment" on rejecting Peltz's demands.
The company has rejected Peltz's proposals several times,
calling them "costly distractions that will harm shareholder
A Wall Street survey conducted by Bernstein Research and
released earlier this month showed that a majority of
institutional investors, including PepsiCo's shareholders,
support a split.
PepsiCo's shares closed little changed at $81.80 on the New
York Stock Exchange on Thursday.