| ||||||||||
| ||||||||||
— Dealmakers —
H.J. Heinz Co. has been rumored as a takeover by Barron's. The Deal's Demitri Diakantonis digs into who might be interested. Kraft Foods Inc., Unilever NV or Nestle SA, perhaps? But, he writes, "don't expect to see the ketchup giant on the auction block anytime soon given the state of the financial markets." Meanwhile, Heinz's international push continued in 2008. In early October, the company launched a $216 million bid for Australia's Golden Circle Ltd., which makes jams and canned fruit. Nearly two weeks later, as The Deal's Gerald Magpily noted, the company's CFO Art Winkleblack said during a conference: "The pipeline for potential acquisitions has risen to unprecedented levels."
The events come nearly two months after The Deal's Corporate Dealmaker wondered whether the Pittsburgh-based company was, like its peers, looking toward emerging markets for growth. The buzz stemmed from comments made by the company's chairman, president and chief executive William Johnson at Heinz's annual shareholder meeting that it was looking at opportunities in "the developed and developing world," and that the company expects sales in emerging markets to contribute to a third of its revenue growth in the next two years. Johnson also said Campbell Soup Co. would make a "nice fit," according to a Reuters report, but stopped there.Heinz hasn't been terribly acquisitive of late, but has, like its Golden Circle buy, looked abroad recently. The company unveiled plans July 2 to acquire French sauce and salad dressings maker Benedicta SA for undisclosed terms.
Meanwhile, August marked the second anniversary of the showdown in the battle for control of Heinz's board. The meeting went down Aug. 16, 2006; the results came in about a month later, with Nelson Peltz -- a longtime vocal investor in food companies -- gaining a board seat for himself and one for a member of his slate of five nominees, Michael Weinstein. Peltz, at the helm of Trian Fund Management LP, eagerly pursued appointments for his slate of directors to Heinz's board, while Johnson fought heartily to make sure that didn't happen. ONE STICKY SITUATION Peltz, a longtime vocal investor in food companies, sunk his teeth into Heinz in the spring of 2005 and went public with his proposed board appointments in March 2006. His slate of nominees included:
Among those Peltz said he wanted ousted were:
Peltz got his way with the former, but the latter remained a director. Heinz agreed in July 2006 to add up to two director slots to its board, expanding it to 14, and proposed corporate governance changes. RED-HOT EXCHANGES The battle went back and forth for months, and rarely were Johnson and Peltz at a loss for words. Some particularly prickly remarks from each side: "Had Mr. Johnson delivered on his five restructuring plans for Heinz, S&P would not have downgraded the Company's debt ratings today. ... Put another way, Trian believes that if management had achieved all that they committed to in previous restructurings, ratings would have gone up. This is yet another example of Johnson's complete lack of credibility." -- A Deal article June 29, 2006 quoting a Trian statement after Standard & Poor's downgraded Heinz's debt in June. "Now is not the time for adding a self-interested and divisive voice inside the Heinz board room or for distracting the Heinz board and management team. ... Independent stock analysts have characterized his [Peltz's] plans as 'overly aggressive' and 'not achievable.' " -- A Deal article June 16, 2006 quoting Johnson in a cover letter to a proxy statement urging shareholders to vote down Peltz's proposed slate of directors. "As for Mr. Peltz's assertion that Heinz should try to grow the overall market for ketchup, [Johnson] said: 'Tell G.M. to sell more cars.'" -- A NY Times article June 27, 2006. THE GREAT SLIM DOWN In May 2006, Trian detailed its thoughts for a Heinz makeover in a 28-page document. To save Heinz $575 million, Trian suggested a diet of cost-cutting measures, leveraging new debt and shedding assets, and even hinted at a possible sale down the road. The Cayman Islands-based hedge fund wants the food company to put more money into advertising, suggesting measures like doing away with packets and making a small package of ketchup and offering it exclusively to McDonald's Corp. Peltz has been dealmaking since the 1980s and has had his hand in several food companies, most recently effectively agitating for change at Wendy's International Inc., Cadbury Schweppes plc and Kraft Foods Inc.
Meanwhile, back in 2006, Heinz's restructuring plan centered on refocusing its base: condiments, meals and snacks, and infant nutrition. Some highlights include:
Visit the complete Dealwatch Archive |
|
|
|
|
|
