Procter & Gamble

In what is considered the biggest and most expensive proxy contest ever, Procter & Gamble says Nelson Peltz, activist hedge fund manager for Trian Fund Management LP, has lost his fight for a seat on P&G's board.

The two sides collectively spent more than an estimated $100 million on mailings, phone calls and advertisements to woo investors.

Peltz, whose Trian Fund Management LP owns a $3.5 billion stake in the world’s largest consumer products maker by market capitalization, refused to concede defeat, saying the vote was too close to call before the certified results are released, according to a Reuters report.

Peltz had called for the maker of Pampers diapers, Gillette razors and Tide laundry detergent to reorganize into three business units: beauty, grooming and healthcare; fabric and home care and baby, feminine and family care.

P&G, led by Chief Executive David Taylor, countered that management is already working on several operational changes, and that Peltz does not have the relevant experience to be helpful in the process.

“I shook (Peltz‘s) hand, he shook my hand, and we said that just like we have through this proxy contest... folks want to make it a fight, but it is about ideas and the future. I told Nelson I will continue to listen to him as I have throughout this,” Taylor told a news conference after the shareholder meeting.

Peltz was widely seen as the favorite to win the contest, because he had the backing of all three top shareholder advisory firms, which recommend how mutual funds should cast their vote, and was only seeking one board seat on P&G’s 11-member board.

This is only the third time Trian has waged a proxy contest in its 12-year history. Two years ago it narrowly lost a fight with DuPont, although within a year the company’s CEO was out a job and a faster cost cutting was underway.

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