This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Activist Investor to Shake Up Dr Pepper

NEW YORK (AP) -- Billionaire activist investor Nelson Peltz is pledging to get more involved in Dr Pepper Snapple Group (DPS) to fine-tune its operations and boost the beverage company's stock price, even if it means nominating new directors to the board and taking other actions.

Peltz, through his Trian Fund Management L.P. investment firm in New York, disclosed that his entities collectively hold 18.2 million shares, or a 7.18% stake, in Dr Pepper, according to a Friday filing with the Securities and Exchange Commission.

Trian's stake includes 10.8 million shares, or 4.26% of Dr Pepper, represented by swaps. Trian entered into swaps with Merrill Lynch International from October 2007 to March 2008 at prices of $24.24 to $24.75. Some swaps expire next June, and the rest expire in 2010.

By the settlement date of the swaps -- either at expiration or earlier termination -- Trian must pay up if there is "negative price performance" compared to an agreed-upon benchmark and vice versa. Payment must be in cash and not company shares. The swap shares also carry no direct or indirect voting rights.

Trian said that since Dr Pepper was spun off from Cadbury Schweppes Plc (CBY) and became publicly traded in May, total shareholder return has been negative 40.7%. In contrast, the S&P 500's beverages index was down 12.6%, and its consumer staples index fell 15.2%. On Friday, Dr Pepper closed at $16.96, up 21 cents, but down 44% from its 52-week high of $30.

Trian said it has met with Dr Pepper's executives and board of directors to address its concerns. The investment group said Dr Pepper is seen by Wall Street more as a beverage bottler than a branded beverage company even if it owns its most important brands.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
SYM TRADE IT LAST %CHG
AAPL $125.01 -0.63%
FB $78.10 0.70%
GOOG $524.22 -1.24%
TSLA $230.43 -1.08%
YHOO $41.66 0.87%

Markets

DOW 17,841.98 -86.22 -0.48%
S&P 500 2,080.15 -9.31 -0.45%
NASDAQ 4,919.6440 -19.6830 -0.40%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs