Trian, Sandell, JANA, Starboard At SALT On The Age of the ActivismVW Staff
Ed Garden, along with Nelson Peltz and Peter May, founded Trian in November 2005. Trian invests in under-performing and undervalued public companies and looks to work constructively with the management and the Board of Directors to create lasting shareholder value. Trian spoke at the SALT Conference along with other famous activists. Coverage can be found below.
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Barry Rosenstein is the founder and Managing Partner of JANA Partners LLC, an event driven hedge fund located in New York with approximately $10 billion in investments and commitments. JANA focuses on companies with a compelling valuation and various catalysts to realize value
The Age of the Activism: Uncovering Value for Profit
Ed Garden, Chief Investment Officer & Founding Partner, Trian Partners
Christopher A. Pucillo, Chief Investment Officer & Chief Executive Officer, Solus Alternative Asset Management
Barry Rosenstein, Managing Partner, JANA Partners LLC
Tom Sandell, Founder, Chairman & Chief Executive Officer, Sandell Asset Management
Jeff Smith, Managing Member, Chief Executive Officer & Chief Investment Officer, Starboard Value, L.P.
The Age of the Activism: Uncovering Value for Profit: Notes
Very solid lineup. Speaking about the changing dynamics of activism
We get a lot of what we call RFAs, “requests for activism,”
“10 years ago I couldn’t get a long only account to return my phone calls. Today they would be viewed as irresponsible”, which shows the change in the atmosphere
Trian is focused on turning around great companies. Our job is to drive the income statement.
Tom Sandell on Europe: best opportunities are in EU. cheaper than US on all measures
Recovery in Europe has been a drawback thus far and could see a lost decade there. Lot of great companies with great assets
FirstGroup plc (LON:FGP) (company in UK) they really like.
Jeff Smith: Companies that we are targeting, have not been performing very well. Our track record is better than theirs.
Our interests are more aligned with shareholder base than managements
Shareholders and PM’s support and trust us more than management because we speak to them more often and have invested in several deals together.
There will always be companies under-performing, thus we don’t see activism ever ending. Valuations change.
Ed Garden on Pepsi —don’t prefer proxy fight, try to fight common ground with management
There will be material change at Pepsi.
Mondelez International Inc (NASDAQ:MDLZ) separating coffee piece
PepsiCo, Inc. (NYSE:PEP) is too bureaucratic
Pucillo acquired large stake in bankrupt Energy Future Holdings Corporation Known as TXU, 23B in bank loans
Barry talking about Walgreen Company (NYSE:WAG) favorite idea, and largest position. It is a dynamic company, brand. Has underperformed due to thin EBITDA margins
Sandell favorite idea, FirstGroup plc (LON:FGP) in UK, transportation company
Management team cannot execute
worth 200 pence per share (50% from here in upside)
Spin out US transportation business (yellow buses) and sell off greyhound buses
need to pay down debt
Consolidate management and other inefficiencies
Jeff Smith on Darden Restaurants, Inc. (NYSE:DRI) — a lot going on
Company has not been run well for the last decade
Hidden asset: own their real estate (worth $4B) on a $7B market cap company
Structure real estate as REIT
Inefficiencies are large
250 basis points off vs the industry (should be higher bc of scale)
At some point Darden (NYSE:DRI) will work with us and we will make a lot of money for shareholders
Starboard has a large short position in the Russell as a hedge for protection.
They can’t always sell out of their companies and some become big, so we are trying to mitigate the downside risk.