Peltz Closes In on Heinz Board
H.J. Heinz Co., fighting billionaire investor Nelson Peltz’s bid to restructure the company, said Wednesday that Peltz might have enough shareholder votes to place nominees from his five-member slate on the company’s board.
Chief Executive William Johnson said after Wednesday’s annual meeting that he was optimistic that Peltz wouldn’t win as many as four seats on the board of Heinz, the world’s largest ketchup maker. Vote totals won’t be available for weeks.
Peltz and his Trian Fund Management Inc. have been locked in a proxy contest with the company since March, urging it to cut $575 million in costs, increase marketing and sell assets. He nominated a minority slate while Pittsburgh-based Heinz sought reelection of all 12 board members.
The Trian slate includes professional golfer Greg Norman and Peter May, a Peltz associate for three decades.
“Any seat is a victory,” Peltz said after the meeting. “When this whole thing started back in March, I think the idea that Trian would have gotten a seat was close to preposterous. But here we are today, and we are wondering how many seats we are going to get, not if.”
Any kind of settlement between the two sides isn’t likely, Johnson said. Even if Peltz is elected, Johnson said he planned to stay at Heinz.
Peltz and Trian make up Heinz’s second-largest shareholder with 5.5% of the company’s stock.
“Heinz is not broken,” Thomas Usher, the presiding director, told shareholders at the meeting in Pittsburgh. “The board will hold management accountable and shareholders can hold us accountable.”
Peltz, 64, said he planned to work with existing management.
Johnson, 57, in June moved to reduce the company’s spending by $355 million, eliminate 2,700 jobs and buy back $1 billion in shares. Heinz will see 8% sales growth and double-digit earnings growth in the first quarter, he said Wednesday.
By prompting management to make changes and sending the stock price up, Peltz has already achieved his goals, said Herbert Denton, president of New York-based Providence Capital Inc., which owns Heinz shares.
“They should say they won and not even bother to count the votes,” he said. “Peltz won.”
Shares of Heinz rose 16 cents to $41.13. The stock has gained 10% since March 2, the day before Peltz sought to nominate directors.
In March, Peltz got Wendy’s International Inc. to add three of his board nominees after he called for the burger chain to improve results and consider selling its Baja Fresh chain.
Peltz’s Triarc Cos. in May 1997 bought Snapple from Quaker Oats Co. for $300 million and sold it about three years later to Cadbury Schweppes for $1.45 billion in cash.
This week, Peltz disclosed he had a 1% stake in Tribune Co., a Chicago-based media company that owns the Los Angeles Times among other newspapers as well as TV stations.
