Activist Peltz Narrowly Wins P&G Board Seat, New Count Shows
16 Novembre 2017 - 12:12AM
Dow Jones News
By David Benoit and Sharon Terlep
Nelson Peltz narrowly won a seat on the board of Procter &
Gamble Co., an official tally showed, an embarrassing turn of
events for a company that weeks earlier had claimed to have
defeated the activist investor.
After the most expensive proxy fight in history, an independent
firm's count of the 2 billion votes that were cast found Mr. Peltz
had 42,780 more votes than a P&G director, the company said.
That is a margin of 0.0016% of the shares outstanding.
Mr. Peltz quickly claimed a victory Wednesday and called on
P&G to concede the contest and let him into its boardroom. But
the Cincinnati company didn't admit defeat, saying Mr. Peltz "is
leading" but that the tally was still preliminary and subject to
review and a challenge period.
"Both parties will have the opportunity to review the results
for any discrepancies," P&G said.
Shares of P&G rose about 3% in after-hours trading following
the news.
"Trian strongly urges P&G to accept the Inspector's
tabulation and not waste further time and shareholder money
contesting the outcome of the Annual Meeting," Mr. Peltz's Trian
Fund Management said in a news release. "Shareholders have voted,
and they have indicated that they want Nelson Peltz to join the
Board."
A month ago, P&G announced that its preliminary vote count
showed the company's 11 board nominees were elected by 6.15 million
votes. The activist had claimed the vote was too close to call.
P&G was the biggest U.S. company by market value to face a
proxy contest. The two sides spent at least $60 million and
crisscrossed the country for weeks to win shareholder support.
If the result holds up, Mr. Peltz is likely to push the company
to simplify its structure and rethink how it positions its brands
to recapture market share.
The two sides now head to what is known in activist circles as
"the snake pit," where P&G and Trian can investigate each
contested vote. It is part of a certification process that checks
whether shareholders had the authority to vote, signed and marked
ballots correctly and to verify that no one voted more than
once.
The activist camp had maintained the vote was too close to call
because P&G's initial tally required the company to estimate
votes by individuals who supported Mr. Peltz and cast their ballots
directly to his fund. P&G had said it was confident the initial
count would hold up.
P&G is still deciding whether to contest the results, a
person familiar with the matter said.
The tally has been handled by IVS Associates Inc., an
independent proxy counting firm, whose employees have reviewed
ballots collected by both P&G and Trian. While many votes are
cast electronically, IVS also has to check paper ballots by
hand.
Typically, IVS's preliminary count is quickly tallied in the
week after a vote, but the long delay for the P&G count was
viewed as a sign the firm was being extra thorough and careful with
the count. That could reduce the chance of a big swing in the
recount.
The uncertainty of the P&G vote was magnified by the large
portion of shares held by small investors, leaving both sides
scrambling for support from some 2.5 million shareholders instead
of just a few dozen who typically control such votes. About 40% of
P&G stock is owned by retail investors, compared with an
average of about 12% in the S&P 500, according to S&P
Global Market Intelligence.
On top of that, a significant chunk of the shares were also
owned in the actual name of the investors, instead of just
brokerage names, which is far more typical. The votes from those
shares are only sent to the side who they are voting for, meaning
both P&G and Trian had blind spots as they tried to determine
the outcome.
Mr. Peltz received 971,953,651 votes, while the P&G director
with the least number of votes, Ernesto Zedillo, a former president
of Mexico, received 971,910,871 votes, according to the tally by
IVS.
Write to David Benoit at david.benoit@wsj.com and Sharon Terlep
at sharon.terlep@wsj.com
(END) Dow Jones Newswires
November 15, 2017 17:57 ET (22:57 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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