Dive Brief:
- PepsiCo has told Nelson Peltz — again — that it will not follow his suggestion to split the company in two and separate its snacks unit from its beverage operations.
- In a harshly worded letter, the presiding director of PepsiCo's board said "the board and management have concluded that the financial engineering you propose erodes value for shareholders rather than creates value." The letter comes a week after Peltz penned a 37-page letter outlining his plan..
- Pepsi's management and board have repeatedly rejected Peltz' idea, some version of which he has been floating since the summer.
Dive Insight:
Peltz' Trian Fund owns some $1.2 billion in PepsiCo stock. That, presumably, gives him the right to voice his opinion. But at this point, it should be clear even to the famously obstinate investor that PepsiCo doesn't think his idea is a good one.
It's worth noting that when Peltz first proposed a version of this plan, he wanted Mondelez International to merge with Pepsi's snack unit. Mondelez and Pepsi both disliked the idea — and Peltz kept pushing it. Eventually, Mondelez decided to bring Peltz on as a board member. That looked like Chamberlain-esque appeasement to us, and we're not surprised in the least to see that Peltz is using the added weight of his board seat to continue to agitate for a plan that no one other than him seems to like.
So we're with PepsiCo on this one: If repeatedly rejecting the deal didn't work, and if an olive branch and a board seat didn't work, it's time to be rude.
