Yacktman Asset Management Backs Peltz in P&G Proxy Fight -- Update

Yacktman Asset Management entered the proxy fight against Procter & Gamble Co. on Thursday, backing the election onto the company's board of activist investor Nelson Peltz, who has pressed the consumer-goods company to restructure its business.

Yacktman, which said it holds more than 15 million shares of P&G valued at more than $1.3 billion, said in an open letter addressed to the board that it plans to vote in favor of Mr. Peltz of Trian Fund Management at a shareholder meeting scheduled for Oct. 10.

"Yacktman believes that, after years of business and share-price underperformance, P&G shareholders deserve a highly engaged, shareholder-focused voice in the boardroom," the fund said in its letter. Yacktman added that it believes Mr. Peltz is the right choice to ask "the tough questions" at P&G and demand "strong execution from management."

Yacktman's P&G stake is one of the largest holdings of the Austin, Texas-based fund, which managed some $8.48 billion in assets as of June 30, according to FactSet. The company, which describes itself as "long-term, patient investors," said "this is the first time we have written about an election of directors for one of our portfolio investments" because of its conviction that Mr. Peltz should join the board.

P&G has rejected Mr. Peltz's attempt to get a board seat, saying his ideas are either ill-informed or retreads of work that is already under way. P&G and Trian didn't immediately respond Thursday to requests for comment.

Trian, which owns a 1.48% stake in P&G valued at $3.5 billion, has said the company should organize itself into just three business units, down from 10, by combining businesses, such as beauty, grooming and health care. The units would operate autonomously and have total control over sales, marketing, manufacturing and other major functions.

P&G downsized to 10 business units from 16 as part of a restructuring effort carried out before current Chief Executive David Taylor took over in late 2015. The company said it has no plans to further reduce that number.

Earlier this month, Trian criticized P&G, saying the company hadn't "created a meaningful new brand since Swiffer, almost 20 years ago," according to a presentation.

Write to Ezequiel Minaya at ezequiel.minaya@wsj.com

Yacktman Asset Management entered the proxy fight against Procter & Gamble Co. Thursday, backing the election onto the company's board of activist investor Nelson Peltz, who has pressed the consumer-goods company to restructure its business.

Yacktman Asset Management, which said it holds more than 15 million shares of P&G valued at more than $1.3 billion, said in an open letter addressed to the board that it plans to vote in favor of Mr. Peltz of Trian Fund Management at a shareholder meeting scheduled for Oct. 10.

"Yacktman believes that, after years of business and share-price underperformance, P&G shareholders deserve a highly engaged, shareholder-focused voice in the boardroom," the fund said in its letter. Yacktman added that it believes Mr. Peltz is the right choice to ask "the tough questions" at P&G and demand "strong execution from management."

Yacktman's P&G stake is one of the largest holdings of the Austin, Texas-based fund, which managed some $8.48 billion in assets as of June 30, according to FactSet. The company, which describes itself as "long-term, patient investors," said "this is the first time we have written about an election of directors for one of our portfolio investments" because of its conviction that Mr. Peltz should join the board.

P&G has rejected Mr. Peltz's attempt to get a board seat, saying his ideas are either ill-informed or retreads of work that is already under way. In a statement Thursday, P&G said its 2017 results demonstrate that the plan it has in place is working.

"While we did not ask for this proxy contest, we are taking the necessary steps to ensure that our shareholders understand the facts," the company said. "P&G is focused on creating value for the short-, mid- and long-term and we are committed to preventing anything from derailing the progress we are making."

Trian didn't immediately respond Thursday to a request for comment.

Trian, which owns a 1.48% stake in P&G valued at $3.5 billion, has said the company should organize itself into just three business units, down from 10, by combining businesses, such as beauty, grooming and health care. The units would operate autonomously and have total control over sales, marketing, manufacturing and other major functions.

P&G downsized to 10 business units from 16 as part of a restructuring effort carried out before current Chief Executive David Taylor took over in late 2015. The company said it has no plans to further reduce that number.

Earlier this month, Trian criticized P&G, saying the company hadn't "created a meaningful new brand since Swiffer, almost 20 years ago," according to a presentation.

Mr. Peltz, whose past targets include DuPont Co. and H.J. Heinz Co., ratcheted up the standoff with P&G this summer by hiring Clayton Daley, a former chief financial officer for the company, to aid in the effort to win a board seat.

P&G, which has a market value of about $235 billion, is the largest company to face such a proxy fight. P&G posted higher profit in its most recent quarter despite a slump in consumer spending on staples from diapers to toothpaste.

Sharon Terlep contributed to this article.

Write to Ezequiel Minaya at ezequiel.minaya@wsj.com

(END) Dow Jones Newswires

September 14, 2017 12:07 ET (16:07 GMT)