Peltz Pelts Heinz With Five Board Nominees

25 April 2006

Interventionist US investor Nelson Pelz on Monday declared war on the management of global foods giant H J Heinz, proclaiming his intention to proceed with a proxy contest to shoehorn himself plus four additional nominees to the company's board [WAMN: 08-Mar-06].

The decision follows the breakdown of talks last month between the two factions, Pelz meeting mano-a-mano with William R Johnson, who single-handedly holds down the triple roles of Heinz chairman, president and ceo.

At this meeting, according to a SEC filing yesterday by Peltz' firm Trian Fund Management, Pelz exhorted Johnson to make "changes in strategy" aimed at improving Heinz's stock performance. Among the changes urged was the election of Peltz' plus four others to Heinz' board of directors.

Two of the four, Peter May and Edward Garden, are directors of Trian and close associates of Peltz; the third nominee is another Peltz confidante, Michael Weinstein, chairman of Inov8 Beverages, a marketing firm specializing in soft drinks.

But the real eyebrow-raiser was the fifth nominee - Australian professional golfer Greg Norman, whose business experience is limited to the design of golf courses and the touting of sportswear bearing his name.

Following that meeting Heinz reportedly responded with proposals of its own, saying that it "would consider" the appointment of the Peltz quintet to its board.

Good as its word, Heinz considered the idea - and rejected it. Hence Peltz' decision to proceed with a proxy vote at Heinz annual meeting in August.

Peltz is wondrously vague as to the changes he seeks at the Pittsburgh-based foods giant. According to his SEC filing, he and his associates "see opportunities to create value... through sharper strategic focus, better operational execution and more efficient uses of capital".

The filing also revealed that Trian Fund Management and its entities now hold 5.4% of Heinz stock.

Data sourced from Wall Street Journal Online; additional content by WARC staff