Sysco Corp. gave Nelson Peltz two seats to the company’s board Thursday, just a week after it was revealed that the activist investor had taken a position in the Houston-based food distributor.
Peltz, CEO and founding partner of Trian Fund Management, along with Trian partner Josh Frank, were named to Sysco’s board of directors, effective on Friday. The move will give Sysco 12 board members.
“We are firmly committed to enhancing value for all Sysco shareholders, and always welcome constructive input toward driving long-term shareholder value,” Jackie Ward, non-executive chairman of Sysco’s board of directors, said in a statement. “Nelson and Josh will bring our board informed perspective based on their significant experience based on their significant experience in the food products industry. We have engaged in constructive dialogue with Nelson and Josh and look forward to benefiting from their insights and contributions.”
Last week, Trian disclosed that it had taken a 7-percent stake in Sysco, and suggested in a U.S. Securities and Exchange Commission filing that the food giant’s operating and financial performance “underperformed relative to its potential.”
“Sysco is a leader in its business, and we believe it is undervalued and has tremendous long-term potential,” Peltz said in a statement. “As Sysco’s largest shareholder, with an approximate 7.1-percent ownership position, we welcome the opportunity to work constructively with the board and management.”
The move comes weeks after Sysco’s planned merger with US Foods, the second-largest distributor, fell apart amid government scrutiny. Sysco recently disclosed that merger and termination costs would total $693 million.
“As evidenced by our recent full-year and fourth-quarter results, Sysco is well positioned to continue building on its momentum to enhance long-term shareholder value,” Sysco CEO Bill DeLaney said in a statement. “We respect Trian’s experience and value the perspective they will bring as we continue to focus on supporting the success of our customers, profitably growing our business and improving our return on invested capital.”
Trian, also a major shareholder in Sysco customer The Wendy’s Co. — where the 73-year-old Peltz is chairman — bought 22.8 million shares, for a total of $842 million, according to SEC filings.
“We are excited to begin working with Sysco’s leadership to design and execute initiatives to drive shareholder value creation over time,” Frank said.
Contact Jonathan Maze at [email protected]
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