Nelson Peltz has resumed his call to break up PepsiCo Inc (PEP.N) less than a week after the maker of Pepsi-Cola and Lay’s potato chips said it would not spin off its North-American beverage business.
The snack and drink giant confirmed a Wall Street Journal report that Peltz’s Trian Fund Management LP sent a 37-page letter to its board of directors on Wednesday.
Peltz has been urging PepsiCo to spin off the beverage business and focus on its billion-dollar snack brands Lays, Cheetos and Doritos.
PepsiCo, like rival Coca-Cola Co (KO.N), has been battling declining soda sales in developed markets, especially the United States, as health-conscious consumers reach for non-carbonated beverages such as juices and health drinks.
Wednesday’s letter outlined why Trian still thinks PepsiCo should spin off its beverage business, the Journal reported. (link.reuters.com/zek96v)
“PepsiCo’s management and board of directors have spoken clearly on this issue and are fully aligned with our strategy outlined last week,” a PepsiCo spokesman said in an email to Reuters.
Trian, which says it owns about $1.2 billion in PepsiCo stock, also informed the company that it will begin meeting with shareholders “immediately” and might conduct public shareholder forums as it tries to galvanize investor support for a split, the newspaper reported.
Trian was not immediately available for comment outside regular U.S. business hours.
PepsiCo, in its response to Trian’s letter, said, “Our focus is on delivering results for our shareholders, not new, costly distractions that will harm shareholder interests.”
Peltz had also urged PepsiCo to create a snack food giant by acquiring Oreo cookie maker Mondelez International (MDLZ.O), but dropped that push after winning a seat on the Mondelez board last month.
Last week, after reporting a better-than-expected profit, PepsiCo’s Chief Executive Indra Nooyi said, “Decoupling our beverage and snack businesses in North America would significantly reduce our relevance to our customers.
The company had said its decision not to spin off the business was taken after an exhaustive review that involved external consultants and bankers.
“We are confident in our ability to deliver long-term shareholder value as an integrated food and beverage company,” PepsiCo said on Wednesday.