Less than a week after disclosing a stake, Nelson Peltz‘s Trian Partners issued an amended 13D regarding SYSCO Corporation (NYSE:SYY), in which it reiterated its stake and announced that the company appointed Nelson Peltz and Josh Frank, a partner at Trian, to its board of directors. Following the appointments, Sysco’s board of directors was expanded to 12 members. Trian Partners holds a 7.08% position in the food distribution company, which contains 42.06 million shares.
In addition, Mr. Peltz will serve on the company’s Corporate Governance and Nominating Committee, while Mr. Frank will join the Compensation and the Finance Commitees of SYSCO Corporation (NYSE:SYY)’s Board. Trian has also entered into customary confidentiality arrangements regarding Sysco’s information.
The news are not surprising, because Mr. Peltz expressed his interest in requesting board representation on Sysco’s board of directors in Trian’s first filing last week. Trian has previously engaged in discussions with the company’s President and CEO William J. Delaney and Non-Executive Chairman of the Board Jackie M. Ward.
Mr. Peltz has an extensive track record of serving on the boards of different companies. Last year, the investor was appointed to the boards of Bank of New York Mellon Corp (NYSE:BK) and Mondelez International Inc (NASDAQ:MDLZ). Previously, Nelson Peltz served on the boards of The Madison Square Garden Co (NYSE:MSG) and HJ Heinz. In addition, in January Trian appointed its representative on the board of PepsiCo, Inc. (NYSE:PEP), after two years of confrontations regarding the spin-off of the company’s snack business. Trian also conducted an aggressive proxy contest against DuPont and tried to appoint Mr. Peltz and three other directors to the board, but failed, as shareholders re-elected all 12 current members of the board.
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With the appointment of two Trian’s representatives on SYSCO Corporation (NYSE:SYY)’s board, the company will be in the spotlights, expecting Peltz’s next move regarding the company. The stock has been gaining ground since Trian disclosed its stake in the company and managed to offset its decline. In this way, it currently trades around 0.9% year-to-date, but today it has declined by more than 1%.
When we look at Sysco Corporation, we see that, overall, investors are bullish on the stock. Even though the number of funds with long positions declined to 29 from 37 during the second quarter, the aggregate value of their positions went up to $2.21 billion, from $2.13 billion, amid a 3% decline of the stock during the same period. Moreover, these investors held more than 10% of the company at the end of June, which is another positive figure for the company.
Aside from Trian Partners, which actually initiated a stake in Sysco during the second quarter, as it disclosed ownership of 10.22 million shares in its latest 13F, another investor bullish on the company is Donald Yacktman‘s Yacktman Asset Management, which holds 33.96 million shares, and inched up its position by 9% during the same period. In fact, most of the largest shareholders of SYSCO Corporation (NYSE:SYY) among the funds we track, either initiated new stakes in the company, or boosted their positions between April and June. For example, Joel Greenblatt’s Gotham Asset Management raised its stake by a sevenfold to 1.03 million shares, while Glenn Russell Dubin’s Highbridge Capital Management added 960,580 shares to its holding, which contained 977,300 shares at the end of June.
With this in mind, as the smart money are bullish on Sysco, Trian’s involvement in the company can be seen as another catalyst to increase the shareholder value.
Disclosure: none
