By Chelsey Dulaney
Nelson Peltz's Trian Fund Management LP disclosed Friday that it
has taken a 7.08% stake in Sysco Corp., saying the
food-and-supplies distributor has underperformed.
The stake makes Trian the largest shareholder in Sysco,
according to FactSet data.
In a regulatory filing, Trian said it has met with Sysco's chief
executive and chairman about ways to enhance the company's value,
including by increasing capital returned to shareholders and better
aligning compensation with the company's performance.
Trian said it has also discussed board representation with the
company. Trian, which has gained board seats at companies including
Mondelez International Inc. and Bank of New York Mellon Corp., said
it expects to have further discussions with Sysco.
Trian said it expects to have further discussions with
Sysco.
In a statement, Sysco confirmed that Trian has taken a
"significant" stake in the company.
"We welcome collaborative discussions with investors who share
our interest in creating value by marketing and delivering great
products and services to our customers with exceptional service,"
the company said. "We cannot speculate on Trian's intentions or
future actions."
Sysco shares, up about 4.5% this year, gained 7.7% in afternoon
trading.
Houston-based Sysco, the nation's largest distributor of food
and other supplies to restaurants and cafeterias, has been piecing
together a new growth strategy after dropping its $3.5 billion plan
to buy US Foods, following a June ruling by a federal judge
effectively blocking the deal on antitrust grounds.
Chief Executive Bill DeLaney said earlier this month that Sysco
has shifted its focus to smaller acquisitions, internal
cost-cutting and updating its product assortment and technology to
compete with rivals that have more natural and organic items and
better online ordering.
Earlier this month, Sysco reported a drop a 71% drop in profit
for its latest quarter, hurt by charges stemming from the abandoned
plan to acquire US Foods.
Write to Chelsey Dulaney at Chelsey.Dulaney@wsj.com
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