Sysco said it was also appointing Josh Frank, a partner at Peltz’s Trian Fund Management LP, to the board effective Friday. “As Sysco’s largest shareholder with an approximate 7.1 percent ownership position, we welcome the opportunity to work constructively with the Board and management”.
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That shows how the activist investors are fast gaining a hold on the public companies.
Houston-based Sysco Corp.
On Thursday, Sysco’s nonexecutive chairman, Jackie Ward said “We have engaged in constructive dialogue with Nelson and Josh and look forward to benefiting from their insights and contributions”. Last year, activists gained board seats at a record 107 companies, 91 of them through pacts negotiated with the companies, according to data provider FactSet.
For long, Trian has proved to be a victor in securing board seats.
New board member Nelson Peltz noted: “Sysco is a leader in its business, and we believe it is undervalued and has tremendous long-term potential”.
Sysco, which has reported a rise in quarterly profit just once in the last three years, supplies to restaurants, hospitals and schools around the country as well as the U.S. military.
Trian, founded by Peltz with partners Peter May and Ed Garden in 2005, manages more than $10 billion and focuses its activist investments on consumer, industrial and financial companies – in particular conglomerates.
Sysco has scheduled an investor conference for September 15, when it plans to discuss its plans for cost-cutting, smaller acquisitions, and improving its technology and product assortment.
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Fellow new director Josh Frank added: “We are excited to begin working with Sysco’s leadership to design and execute initiatives to drive shareholder value creation over time”.
