Dive Brief:
- Sysco Corp. saw its stock price rise 7.4%, the highest in 20 months, after activist Trian Fund Management disclosed in a 13D regulatory filing that it had taken a 7.1% stake in the company. Trian also said it may seek representation on Sysco's board.
- Trian was founded by Nelson Peltz, an investor long known for having his hand in the food industry, particularly food and beverage conglomerates. Past dealings have included Mondelez International, Kraft Foods Group, H.J. Heinz Co., and PepsiCo Inc., among others.
- According to Trian's filing, Sysco is not meeting its potential and "should adopt strategic and operating initiatives to improve operating margins, enhance working capital efficiency, consider the use of prudent amounts of incremental leverage to increase the amount of capital returned to shareholders, and take steps to better align management compensation with corporate performance."
Dive Insight:
More big name investors have become involved in the food and beverage industries. Last week, activist investor William Ackman announced a $5.5 billion stake in Mondelez, which he was actually involved with in its creation, as Ackman encouraged the spinoff from Kraft years ago.
Also, activist investor Jana Partners LLC bought stock in ConAgra Foods earlier this year and in June took aim at the company's private label business, which Jana recommended ConAgra get rid of. In ConAgra's last earnings report, it announced that it would do just that.