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June 05, 2006 at 08:00 PM
NEW YORK (HedgeWorld.com)–The president of H.J. Heinz Co., under fire from a hedge fund group that owns more than 5% of his company’s equity, set out Heinz’s own “Superior Growth and Value Plan” for the next two fiscal years in a presentation Thursday [June 1] at the Sanford C. Bernstein Strategic Decisions Conference in New York City.
The plan resembles in some respects the plan that Heinz’s board rejected last month when that hedge fund, Trian Fund Management LP, of New York, set it out in a position paper it filed with the U.S. Securities and Exchange Commission.
Pittsburgh-based Heinz plans to save hundreds of millions of dollars by cost cutting, said President, Chief Executive and Chairman William R. Johnson. It will reinvest those savings in marketing, the launch of new products, and research and development. It will spend $317 million in marketing and advertising in fiscal year 2007, for example. That’s an 18.7% increase over 2006.
The new plan also entails a dividend increase, and $1 billion in share repurchases.
The Trian Group issued its reaction to the plan shortly after Mr. Johnson’s presentation. It said that this was the sixth major restructuring or strategic plan announced by the present management team since 1997, and that it announced the fifth of those six only eight months ago. Although it acknowledged similarities between Mr. Johnson’s plan and its own, the big disagreement involves Mr. Johnson’s ability to execute it.
The Trian Group, accordingly, plans to nominate five people to the board at the next annual meeting, now scheduled for Aug. 16, with a record date of June 8. The five are Nelson Peltz, Peter W. May, Edward P. Garden, Greg Norman and Michael F. Weinstein:
?? 1/2 Mr. Peltz, a founding partner of Trian Fund Management LP, is chairman and chief executive of the holding company, Triarc Companies Inc., that owns Arby’s Restaurant Group Inc.
