Pershing Square Capital Management’s Bill Ackman has finally spoken out about taking a stake in Procter & Gamble (PG). He called the stake, which was revealed in an FTC filing, his largest initial investment ever in a company, according to Bloomberg. P&G shares rose 3.8% on Thursday, even as the Dow fell 0.5%.
The investment puts renewed pressure on CEO Robert McDonald. P&G shares are down 4.5% this year.
Investors and analysts have been speculating about Ackman’s intentions.
“Possible transactions include a split-up, divestitures of businesses or a leveraged recapitalization,” wrote S&P Capital IQ analyst Ian Gordon. “We maintain our hold opinion based on our outlook for ongoing operating challenges from competition and negative mix.”
The activist investor has had great successes in his career, including profiting handsomely from MBIA’s (MBI) doomed mortgage protection.
But his forays into consumer-focused companies have been mixed.
He has done well in agitating for changes at some companies, including Kraft (KFT). But he’s also struggled at trying to turn other consumer names around — notably, Pershing Square invested in Borders prior to its bankruptcy, and failed in a proxy battle with Target’s (TGT) board.
P&G has struggled in the past year, as consumers in developed countries� have shied away from some of its higher-priced brands. The company announced a plan earlier this year to cut $10 billion in expenses in the next four years. P&G recently sold Pringles to Kellogg’s (K).
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