DuPont disruptor Peltz now has P&G in his sights

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The man who helped bring a new CEO to DuPont is hunting for bigger game.

The Wall Street Journal (paywall) reported earlier in the year that Nelson Peltz has accumulated a reported $3 billion stake in Procter & Gamble and is now seeking a seat on the board of directors of a company that makes and markets, Gillette Razors, Tide detergents, and Pampers diapers.

Given P&G’s disappointing results over the past decade, Trian has a keen interest in helping the company address the challenges it is facing,” a release from his firm, Trian Partners stated.

In announcing a bid for a board seat, Peltz what he views as many shortcomings with P&G, including deteriorating market share and weak shareholder returns.

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Peltz engaged in a similar strategy with DuPont, using detailed papers that outlined what he viewed as the flawed strategies of the company. He escalated the battle to a proxy war with his own slate of directors.

In response, then CEO Ellen Kullman and the board nominated its own slate. Kullman prevailed after a drama-filled annual meeting in 2015, but was ousted later that year by the board, with new director Edward Breen taking the helm of the company.

Breen engineered the pending merger of DuPont with Dow. The merger will be followed by an announced split into three publicly traded companies, with two based in Delaware.

Peltz and Trian have reduced their stake in DuPont. However, an activist shareholder at Dow has pressed for further spin-offs and the companies are studying further restructuring.

In seeking a board seat at P&G, Peltz said he is not seeking to break up the company or replace its CEO. However, while noting that he wanted to avoid a proxy battle, Peltz did not rule out that option.

Then again, Peltz would face a much bigger adversary with P&G, which has nearly four times the stock market value of DuPont.

In a release announcing plans to seek a board seat, Peltz confirmed that P&G had rejected his proposal to join the board.

P&G has struggled with mature markets and an acquisition of razor giant Gillette.

Gillette is facing nimble competitors like Dollar Shave Club and Harry’s that sell online and have undermined its strategy of making modest improvements to the product and raising prices. Gillette has responded with its own shave club and other promotions.

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