He said what Peltz asked incredulously. That is a 100% lie. Ill put my hand on the Bible. It gets my heart racing. Theyre just so desperate. The chief of Heinz, William R Johnson, is not fazed. Of Peltz, he said, He doesnt understand our business. Corporate Americas biggest food fight is about to get a lot messier.
In less than three weeks, shareholders of Heinz will vote on whether to back the companys current 12-member board and its management or install Peltzs five-member slate. Since Johnson became chief in 1998, Heinzs stock price slid 34% before Peltz arrived on the scene, although a recent plan to overhaul the company has been well received.
But Peltz wants to shake up the ketchup company aggressively, cutting costs and pouring more money into marketing.
The battle has become more than just about a referendum on the companys leadership, it has become a battle of personalities, culture clashes and frequent attempts at mudslinging. For example, D Edward I Smyth, chief administrative officer of Heinz, referred to Peltz's efforts as a smash and grab job, while the Peltz side dismissed Heinz's overhaul: We don't believe their promises, Peltzs business partner, Peter W May, said.
The fight over Heinz, which was founded in 1869 as Heinz & Noble in Pittsburgh selling horseradish, is also part of the greater battle for control of the nations boardrooms that is being waged by increasingly aggressive and vocal shareholders trying to create changes to try to increase stock prices, a tactic that has been employed both successfully and unsuccessfully by investors like Carl C Icahn, Kirk Kerkorian and Bruce Sherman.
Peltz, who made his fortune in the 1980s and 1990s through a string of acquisitionsone with the help of Michael R Milkens junk bondsstarted an investment fund last year called Trian Partners to focus on what he likes to call operational activism, a brand of investor outrage and involve- ment that is focused more on finding efficiencies in a companys operations than simply its balance sheet, leveraging his experience running businesses.
Now Peltz, 63, is trying to spice up Heinz, whose shares have risen about 20% since he went public with his campaign. Peltz insists that he is a long-term shareholder, countering Johnson's assertions that he is a quick-flipper.
NY TIMES / Andrew Ross Sorkin