Is General Electric a Tasty Morsel for an Activist Investor?
Activist investors — known for taking large stakes in companies judged to be ill-managed or undervalued and pushing for change — could have an eye on General Electric (NYSE:GE). Sources familiar with the inner workings of the energy and manufacturing conglomerate have confirmed as much, pointing to the August meeting between the senior management team of GE Chief Executive Officer Jeffrey Immelt and famed shareholder activist Nelson Peltz.
The investor, who is the midst of pushing for a breakup of PepsiCo (NYSE:PEP), a company in which his firm owns a 0.8 percent stake, has earned a reputation for finding value by breaking up complex corporate entities. And GE is undoubtedly a complex corporate entity. It may seem unusual for a corporate agitator to meet with such a company, but a company spokesman did indeed confirm the event.
What remains disputed is the intent of the meeting. “Mr. Peltz was a guest speaker at a dinner for corporate officers as part of our regular annual officers meetings,” GE spokesman Seth Martin told the Wall Street Journal. “We always have external speakers at these meetings. This was a discussion about the markets broadly, not about GE.”
However, through sources with direct knowledge of the event, Fox News learned that Peltz discussed shareholder activism, specifically the demands an activist shareholder might make of GE, which included layoffs and the selling of certain business units to boost stock price. “He spoke specifically about how an activist might look at GE, and what management might do to meet those demands,” the source said.