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Nelson Peltz’s Activist Fund Trian Is Biggest Sysco Shareholder

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Sep. 2 2015, Updated 11:53 a.m. ET

Trian Fund Management acquires Sysco stake

In an SEC (Securities and Exchange Commission) filing on August 14, 2015, Trian Fund Management disclosed it has beneficial ownership of ~42.1 million shares in Sysco (SYY). That represents a 7.08% stake in the company. This makes the activist fund Sysco’s largest shareholder.

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About Sysco (SYY)

Sysco operates as a food supplier to institutions including schools, hospitals, and restaurants. It also supplies equipment to the hospitality industry. The company is ranked 65 on the US Fortune 100 list. Sysco has a leadership position in the industry. Its share of the $264 billion food service market in the United States, Canada, and Ireland was estimated at 17.7% as of the end of 2014.

Peltz elected to Sysco board

Sysco management has welcomed Trian’s investment. On August 20, Sysco (SYY) elected Trian founding partner and chief executive officer Nelson Peltz and another Trian partner Josh Frank to its board of directors, effective August 21, 2015.

Trian’s track record

Trian Fund Management has more than $10 billion in assets under management. The activist fund believes in taking positions in good-quality underperforming companies and suggesting strategies to improve performance.

Peltz said, “Sysco is a leader in its business, and we believe it is undervalued and has tremendous long-term potential.” Peltz is known for taking activist positions in several consumer companies in the past and pushing for changes. Currently, Trian owns stakes in Tiffany & Co (TIF), Wendy’s (WEN), Mondelez International (MDLZ), and PepsiCo (PEP).

Trian has been very vocal about urging global food and beverage giant PepsiCo to either split into two companies—snacks and beverages—or merge with Mondelez (MDLZ) and then spin off the beverage business into a new entity.

Sysco, Mondelez, and PepsiCo together constitute 9.7% of the portfolio holdings in the Consumer Staples Select Sector SPDR Fund (XLP) and 1.3% of the holdings in the SPDR S&P 500 ETF (SPY).

In the next part of this series, we’ll look at Sysco’s historical performance and management’s strategy for the company.

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