The Rising Influence of Rising Affluence

[DewDiligence]

GE rises 5% on Nelson Peltz’s $2.5B stake:

http://www.wsj.com/articles/activist-firm-trian-makes-a-big-bet-on-ge-1444017706

Mr. Peltz’s Trian Fund Management LP said it has accumulated $2.5 billion in GE shares since the middle of May—a roughly 1% stake—making it one of the company’s top 10 shareholders. It amounts to the biggest investment ever for the investment firm, which has a history of pushing well-known companies to dramatically reshape themselves.

…In a “white paper” Trian said it would disclose publicly Monday, the firm calls for the company to steepen cost reductions, consider getting rid of even more of the finance arm and be more cautious on acquisitions. It says the company could take on $20 billion in debt and repurchase shares. In the paper, a copy of which was reviewed by The Wall Street Journal, Trian bemoaned what it calls a “lost decade” for the company’s shares.

…GE, with its $257 billion market capitalization, would be the third-biggest company to be targeted by an activist ever, trailing only campaigns by Carl Icahn at Apple Inc. and ValueAct Capital Management LP at Microsoft Corp., according to FactSet.

For readers of this board, Peltz is a well-known activist investor who played a role in M&A of other companies discussed here (e.g. Heinz).