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Third Point leans on Dutch turnaround expert for Nestle push
June 26, 2017 / 7:57 PM / 6 months ago

Third Point leans on Dutch turnaround expert for Nestle push

AMSTERDAM/LONDON (Reuters) - When billionaire activist investor Daniel Loeb wanted to give his arguments against Nestle’s (NESN.S) performance greater credibility and heft, he turned to one of Europe’s most experienced turnaround experts, Dutchman Jan Bennink.

Loeb’s fund, Third Point LLC, disclosed a $3.5 billion (2.75 billion pounds) stake in the Swiss food group in a letter to its investors late on Sunday in which he said Nestle should boost margins, buy back shares and get rid of non-core businesses including a 23 percent stake in L‘Oreal (OREP.PA).

The letter said that Bennink, a consumer goods industry veteran, was advising it on the Nestle investment and had also personally invested alongside the fund.

“Jan has direct operating experience in four of Nestle’s key categories: coffee, baby food, medical nutrition, and dairy, as well as an unimpeachable record of substantial shareholder value creation,” Third Point said in its letter.

“He brings deep expertise in packaged goods, which greatly enhanced our due diligence process and gives greater credibility to our investment thesis.”

A spokeswoman for Bennink said he was not available for comment.

Bennink made his name as head of Dutch baby food producer Royal Numico, which he joined in 2002 when it was struggling in the wake of several U.S. acquisitions that made it a major player in the U.S. vitamin and nutrition market.

After slimming the company down and refocusing it back on baby food and hospital nutrition products, he sold Numico to Danone (DANO.PA) in 2007, for $16.8 billion. That represented a multiple of 21.7 times earnings, much higher than the average multiple of 15.2 times for food and drink deals at that time.

    Bennink later cemented his reputation when he oversaw the spin-off of Sara Lee’s international coffee arm and also ran the business, which is now controlled by JAB Holding.

    “He has a fantastic reputation, very dynamic, very proactive, with a first-rate track record,” Vontobel analyst Jean-Philippe Bertschy said.

    Activist investors often retain operational experts to advise on investment campaigns, with an eye to nominating them for a board seat in the future - a role Third Point may have in mind for Bennink.

    Ex-AIG Chairman Robert Miller and former Foster Wheeler CEO Raymond Milchovich joined Dow Chemical’s board in 2014 after serving as Third Point advisers in its campaign for changes at the industrial conglomerate.

    Nestle said on Monday it remained committed to its current strategy.

    Additional reporting by Toby Sterling in Amsterdam and Michael Flaherty in New York. Editing by Jane Merriman

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