Pepsi to Nelson Peltz: We’re Breaking Up With the Breakup Talks
Forbes reported Thursday that after many earlier dismissals,Pepsi’s (NYSE:PEP) lead director wrote a letter to activist investor Nelson Peltz, informing him once again that Pepsi would not be dividing its snacks and beverage units, regardless of what Peltz and other investors campaign for.
Peltz, whose Trian Fund Management owns a Pepsi stake of more than $1 billion, has long called for a Pepsi split, first beginning his campaign last summer. His arguments came to a head once again last week, when he came out with a new claim that Pepsi should merge its snacks business with another of his holdings, Mondelez International (NASDAQ:MDLZ).
Pepsi denied Peltz’s requests, explaining that the company’s executives had already done an exhaustive analysis of the business and decided against a split, but just in case they weren’t completely clear, Pepsi leader director Ian Cook letter penned a letter to Peltz this week, confirming that Pepsi’s division would stay together and that the response would be the last of the breakup talks.
According to Forbes, Cook’s letter read: “I am writing to advise you that the board and management are comfortable and in complete alignment in rejecting your proposal.” Cook went on to reinforce that Pepsi would not spend any more time evaluating Peltz’s idea.
Cook’s response isn’t expected to go over smoothly with Peltz, as he has long been combative about Pepsi orchestrating a division. The letter confirms suspicions that Pepsi’s patience with the activist investor is wearing thin and that there is clearly frustration on both sides. The letter also affirmed that not only are Pepsi executives in agreement that its soda and snacks segments should stay together, the company’s board of directors is, too.