Unilever shares surged this morning after it was revealed that notorious activist investor Nelson Peltz had taken a stake in the firm.
However, reports of job cuts in the “low thousands” swirled soon after, which will hit management positions hardest, Bloomberg first reported.
Shares rose six per cent to the to the top of the FTSE 100’s fastest riser column after the billionaire investor’s stake in the FTSE-100 Marmite-maker was reported by the Financial Times yesterday.
The move forms the latest target in a string of major consumer good investments for the billionaire investor, after Peltz most recently oversaw a turnaround in fortunes at consumer goods giant Procter & Gamble. Shares in the US firm rose 85 per cent under his tenure on the board.
But analysts warned activist pressure may not be enough to turnaround the group’s fortunes.
Warren Ackerman, Head of European Consumer Staples at Barclays said: “Whilst the arrival of Nelson Peltz on the board will be viewed as an undoubted positive with investors weighing up that Unilever might become the next P&G, we think for the stock to be able to outperform on a sustained basis we think it will require a change at the top of the company and possibly a relatively sizable margin reset.”
Ackerman warned that the “status quo” was not an option for Unilever but the “stars are aligning with both Unilever management and an activist pushing for more urgency.”
The food group now may be looking to increase investments and spin out its food operations, Ackerman said, but it was still unclear whether Trian will be seeking management change.