Few words are guaranteed to strike more fear into a blue-chip boardroom than Nelson Peltz’s – the activist’s activist.
And beware FTSE-100 chairmen, because he may be turning up on your register very soon.
Peltz and his senior lieutenants have been holding preliminary meetings with City fund managers in recent weeks ahead of the formal launch of a £1bn London-listed vehicle – dubbed Trian I – in the autumn.
His strategy is a familiar one, both in the context of his own track record and that of peers like Edward Bramson, whose £600m stake in Barclays has been the most prominent UK activist situation to emerge so far this year.
Peltz has been tight-lipped about his likely targets, but a £1bn stake in a single company means it’s likely to be in the top half of the FTSE.
My sources tell me that fund managers approached by Peltz have expressed enthusiasm about backing a UK campaign by Trian – although why supposedly active investors need an activist to lead a charge in a British boardroom isn’t obvious.
That’s a critical point; the number of such situations involving blue-chip British companies in recent months (at Hammerson, Premier Foods and Whitbread) reinforces the fact that activism has become a mainstream and permanent
feature of London’s capital markets. Underperforming FTSE-100 boardrooms can no longer afford to be complacent about their vulnerability to Peltz and his peers.
Stobart should pursue Leighton
What a mess. Iain Ferguson’s EU referendum-like triumph at last week’s Stobart Group AGM, garnering 51.2 per cent of the vote, looks like turning out a bit like that of the Cabinet’s Brexiteers – hollow and without a long-term solution in sight.
The margin of victory certainly hasn’t emboldened Ferguson, Stobart’s chairman.
He confirmed on Monday that he would quit the infrastructure conglomerate no later than next year’s annual meeting.
That’s not enough to satisfy Neil Woodford, the fund manager, though, who believes that efforts to find a compromise at Stobart must begin with the reinstatement of
former chief executive Andrew Tinkler to its board.
That, of course, will never fly with the directors who rallied behind Ferguson – all of which leaves a firmament of rival factions on course to destroy value at a once-proud company.
The absence of a genuine dispute over Stobart’s strategy between the two camps makes the whole affair even more bizarre, and underlines the importance of identifying a compromise candidate to replace Ferguson.
M&G Investments, which holds over five per cent of Stobart, has already done that, in the form of Allan Leighton, the Co-op Group and Matalan chairman.
Given the turmoil, it wouldn’t be surprising if Leighton ran a mile in the other direction – but I’d bet that M&G won’t give up on trying to persuade him just yet.
FRC’s pension clampdown
Documents published by the Financial Reporting Council (FRC) can be somewhat dry affairs, but keep an eye out for its revised corporate governance code early next week.
One new provision, I’m told, will stipulate that pension contribution rates for top executives should be aligned with what is available to a company’s workforce.
That should put an end to bosses receiving 30 per cent contributions based on already-large salaries while the majority of employees receive 10 per cent of a much smaller sum.
It’s an overdue change, and the FRC deserves credit for pursuing it.