Famed activist investor Nelson Peltz has stepped up his efforts concerning Pentair plc. Ordinary Share (NYSE:PNR) and registered his first success in so doing, by getting a seat on the company’s Board of Directors. According to a new filing with the Securities and Exchange Commission from Peltz’s Trian Partners, Pentair has agreed to recommend that shareholders vote for an increase in the number of board seats by one and then appoint Mr. Edward P. Garden, Chief Investment Officer of Trian Partners, to the newly created vacancy. The vote will take place at the company’s next annual meeting. The filing also revealed that Trian Partners’ stake in Pentair plc. Ordinary Share (NYSE:PNR) remained unchanged at a little over 13 million shares or 7.22% of the company’s common stock.
The agreement between Trian and Pentair also stipulates that Mr. Garden has the right to attend board meetings in a non-voting capacity until he is officially appointed as a Director. Nelson Peltz and Brian Baldwin, a partner at Trian Management, also have the right to attend board meetings as observers under certain limitations.
“We have maintained an active and constructive dialogue with Trian regarding our common goal of increasing shareholder value, as we do with all of our shareholders. We believe the addition of Ed to our board would bring a shareholder’s perspective and we look forward to benefiting from his insights and Trian’s strong analytical work,” Randall Hogan, Chairman and CEO of Pentair, wrote in a letter to Trian.
Founded almost a decade ago by Peltz, Garden, and Peter May, Trian Partners has grown to manage a public equity portfolio worth in excess of $9 billion. The funds are spread across a number of sectors, with consumer staples leading the pack at 47% of the value of the fund’s portfolio, followed by financial at 21% and materials at 18%. Mr. Peltz has an extensive track record, serving on the Board of Directors of companies like Bank of New York Mellon Corp (NYSE:BK) and Mondelez International Inc (NASDAQ:MDLZ). His activist efforts also won Trian Partners two board seats at PepsiCo, Inc. (NYSE:PEP) in January 2015. The fund has been pushing for Pepsi to separate its profitable snack business from its sluggish beverages business. It’s not been all roses for Peltz however, as he lost a contentious proxy battle with DuPont earlier this year, failing to secure board seats at the company’s latest shareholder meeting. In a more recent move, Peltz convinced the management of SYSCO Corporation (NYSE:SYY) to expand its board of directors and award Trian two seats.
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Jay Petschek and Steven Major are also optimistic about the prospects of Pentair plc. Ordinary Share (NYSE:PNR), having increased their investment in the company by 8% during the second quarter. Their fund, Corsair Capital Management, reported ownership of 255,014 shares valued at $17.5 million in its latest 13F filing. Larry Robbins, on the other hand, has chosen to limit his exposure to the stock, reducing his stake by 18% during the same period of time. His fund, Glenview Capital, now holds some 5.84 million shares worth around $401 million.
Pentair plc. Ordinary Share (NYSE:PNR) is a producer of pipes, pumps, and valves for the energy, agricultural, and infrastructure sectors, and is based in the United Kingdom. So far this year, the company’s stock has fallen by 19% to $54.30 per share, giving the company a market cap of $9.58 billion. Second quarter revenues for Pentair declined by roughly 9% year-over-year to $1.66 billion, while earnings per share came in at $0.81. Analysts estimate revenues of $1.59 billion and earnings of $0.96 per share for the current quarter and have set a mean price target of $64.73 per share on the stock.
Unlike the usual approach of breaking companies up or spinning-off divisions of a company, Trian Partners has convinced the management of Pentair plc. Ordinary Share (NYSE:PNR) to go on a shopping spree to enhance shareholder value. In August, the company announced the acquisition of Erico Global, a manufacturer of fastening products, for $1.8 billion in cash. Pentair hopes the deal, set to be completed by the end of the year, will add some $0.40 to its 2016 earnings per share.
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