Activist investor Bill Ackman's Pershing Square Holdings Ltd disclosed a 7.5 percent stake in Cadbury chocolate and Oreo cookies maker Mondelez International Inc.
Activist investor Bill Ackman’s Pershing Square Holdings Ltd disclosed a 7.5 percent stake in Cadbury chocolate and Oreo cookies maker Mondelez International Inc.
Pershing Square said its beneficial ownership of 120.3 million shares includes forward purchase contracts and call options.
Ackman’s stake is valued at about $5.5 billion based on Mondelez’s closing price on the Nasdaq on Wednesday.
“We welcome Pershing Square as investors in our company,” a Mondelez spokeswoman said. “We’ll continue to focus on executing our strategy and on delivering value for all our shareholders.”
The Wall Street Journal, which first reported that Ackman has built a stake in the company, said the activist investor wants the snack maker to grow revenues faster and cut costs significantly or sell itself to a rival. (https://on.wsj.com/1HrXdBD)
A potential buyer for Mondelez could be the newly formed Kraft Heinz Co, the Journal said, citing people familiar with the matter. Reuters could not immediately reach Kraft Heinz for comment outside regular U.S. business hours.
In 2012, Mondelez spun off its former North American grocery brands business into Kraft Foods Group, which merged with Ketchup maker H.J. Heinz Co earlier this year to form Kraft Heinz.
Ackman’s arrival at Mondelez squeezes the food company between two of the best known activist investors.
Billionaire activist investor Nelson Peltz’s Trian Fund Management LP holds a 3 percent stake in Mondelez, according to Thomson Reuters data. Peltz, who is on Mondelez’s board, played a role in the breakup of Kraft into Kraft Foods Group and Mondelez.
Peltz said in April that he was not pushing Mondelez to do a big deal and wanted the company to continue improving its profit margin, sales and market share.
Reuters could not immediately reach representatives at Trian for comment.
Mondelez has taken several measures to cut costs, including shutting factories and “zero-based budgeting,” which requires managers to justify every expense in each new budgeting period.
Mondelez last week reported a better-than-expected second-quarter profit, helped by lower costs and raised its share buyback plan by $6 billion.