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ZURICH-U.S. activist investor
Daniel Loeb
on Sunday increased the pressure on
Nestle
SA
management to increase its financial returns and sell its stake in L & # 39; Oreal SA, criticizing Nestle for what Mr. Loeb sees as a dull effort to rearrange packaged food The giant strategy.
million. Loeb's criticism, contained in a letter to Nestlé management and a 34-page report, suggests that a whole series of changes were initiated by Nestle last year, including a major share buyback. , a marketing agreement with
Starbucks
Corp.
and investments in fast-growing companies like Blue Bottle Coffee – have not been successful in satisfying the investor.
Loeb's Third Point LLC holds more than $ 3 billion worth of Nestlé shares, or about 1.25% of its stock
"Nestlé's management is not evolving fast enough to exit underperforming and non-strategic businesses, "said Loeb. The general manager of Nestlé
Mark Schneider
and the board of directors. He blasted a "confused strategic approach" that does not take into account the changing behavior of consumers.
Loeb said that Nestle should dispose of 15% of its sales and use the proceeds on acquisitions or buy back more shares. The time has come to adopt this strategy, he said, citing "this era of high multiples and high strategic demand for some of its lower growth activities".
The company, he said, also has no strategic reason for maintaining the property "of its 23% stake in L'Oréal.
Mr Loeb disclosed his participation in Nestle about a year ago and required major changes to improve its financial performance, including share buybacks, by selling non-core assets such as L'Oreal and by adopting a target of formal margin Last June, he launched a stock repurchase of about $ 20 billion.She sold her American confectionery business in January and acquired Sweet Earth Foods, a manufacturer of high quality products. Herbal protein foods
In May, she bought Starbucks coffee and tea in grocery stores and retail stores for over $ 7.
Nestlé has had slow sales in recent years, while like other big consumer goods companies that are all facing the & # 39; changing consumer tastes and the difficulty of raising prices. the modest pace and scale of these changes suggest that Nestle is pleased with its position, "said Loeb in his letter Sunday.
A Nestlé spokesperson did not immediately respond to a request for comment.
write to Brian Blackstone at [email protected]
Appeared in the print edition of July 2, 2018 under the title "Nestle is facing more of warmth on the part of the militants ".
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