Nelson Peltz's Trian Fund Discloses 42.1 Million Share Stake In Sysco

By Tomi KilgoreMarketWatch Pulse

Billionaire activist investor Nelson Peltz's Trian Fund Management disclosed Friday in a regulatory filing a new 42.1 million share stake in foodservice company Sysco Corp. . That stake equates to 7.1% of the shares outstanding, which would now make Trian the largest shareholder, according to FactSet, ahead of Yacktman Asset Management which owned a 5.7% stake at the end of June. "The Trian Group acquired the shares because it believed that the shares, when purchased, were undervalued in the marketplace and represented an attractive investment opportunity," Trian said in the filing. "The Trian Group communicated its view [to Sysco management] that despite having a number of competitive advantages, the issuer's operating and financial performance has underperformed relative to its potential, and that it should adopt strategic and operating initiatives to improve operating margins, enhance working capital efficiency, consider the use of prudent amounts of incremental leverage to increase the amount of capital returned to shareholders, and take steps to better align management compensation with corporate performance." Sysco's stock climbed 7.4% in afternoon trade. It has now gained 4.5% year to date, while the S&P 500 has tacked on 1.3%.

Copyright © 2015 MarketWatch, Inc.

Continue Reading Below