Bobsguide – Food-making giant HJ Heinz has rejected recommendations made by hedge fund Trian Fund Management concerning the way in which its business is conducted.<\/p>\n
The Cayman Islands-based fund, managed by billionaire Nelson Peltz, initially urged the company to make drastic changes to its business strategy, including a slashing of annual costs by $575 million, selling assets and focusing more on its core brands.<\/p>\n
Trian Fund Management hopes to boost share-value for the company, which it says is far less than its potential, providing less than impressive returns for investors.<\/p>\n
The fund itself currently has a 5.4 per cent stake in the packaged-foods company.<\/p>\n
Following the submission of the recommendations to the US’s Securities and Exchange Commission (SEC), Heinz share prices rose by as much as five per cent to reach nearly $43 a share \u00c3\u00a2\u00e2\u201a\u00ac\u00e2\u20ac\u0153 but only half what Trian believe the share price has the potential to be.<\/p>\n
However, Heinz say they will reject the proposals, arguing that they are not in the best interests of all Heinz shareholders, and would be crippling to the company’s business.<\/p>\n
This is only the latest clash between big business and the increasingly influential hedge funds that invest in it.<\/p>\n