You may not have noticed, but the postmen who collect the mail at Lever House have: Dan Loeb has been remarkably quiet. In the year since he declared money management to be the exhilarating equivalent of a “Game of Thrones” episode, he has all but failed to unsheathe his famed Excalibur poison pen. Sure, in the interim he called central bankers crackheads and eagerly rubbed his hands together thinking of all of the “fake dislocations” in the market four years of President Trump will bring, but it has been more than a year since he made an elderly corporate executive cry in public. And even when he doesn’t think much of something, he’s been letting his 13Fs do the talking, rather than his own exquisite put-down prose.
The days of reticence may be coming to an end, for Dan Loeb has made his largest-ever investment, dumping $3.5 billion on a stake in Nestlé, about which he has ideas.
“It is rare to find a business of Nestle’s quality with so many avenues for improvement,” wrote Third Point, which holds a 1.3 percent stake.
Great burn, Dan, but what exactly do you have in mind?
Nestle, which makes everything from Nespresso coffee to Gerber baby food, should conduct a review of its more than 2,000 brands and reduce exposure to underperformers, Third Point said. The company should adopt a formal target of boosting its operating profit-margin to as much as 20 percent by 2020, from about 15 percent in 2016, and double its leverage ratio to free up more cash for stock buybacks, the hedge fund said.
The time is also right for Nestle to sell its L’Oreal position, Third Point said. Nestle owns about 23.2 percent of the cosmetics giant, a stake valued at about $27 billion….
Oh yeah, and fire that asshole Clooney. Pretty straightforward stuff. But how we long before we get to see Loeb really rip into a C-suite again? Not long, probably, thanks to Nestlé CEO Mark Schneider.
Mr. Schneider indicated Monday he plans to hold steady on his own push to spur growth at the maker of Stouffer’s frozen food and Nesquik chocolate milk, in the face of calls for radical change by activist investor Daniel Loeb….
In a short statement Monday, Nestlé responded by saying it keeps an “open dialogue with all our shareholders” but “remained committed to executing our strategy and creating long-term shareholder value.” It said it had no further comment on Mr. Loeb’s stake.