Procter & Gamble declared victory in its bid to keep billionaire investor Nelson Peltz off its board, even as the activist’s hedge fund said the vote is still too close to call.
The world’s largest consumer-products company said all 11 of its directors were elected, based on preliminary results. Minutes later, Peltz’s Trian Fund Management said the outcome will take more time and that it was awaiting certification by an independent inspector.
The outcome came as bad news to investors, some of whom viewed Peltz as an advocate for their interests. The shares fell as much as 2.5% to $89.86 on Tuesday, marking the biggest intraday decline in about two weeks.
For P&G, the biggest company ever targeted by an activist in a proxy fight, the result is a vindication of its claim that it’s already tackling the shortcomings called out by Peltz.
The investor argued that P&G suffered from a bloated structure and a lack of new brands favoured by younger shoppers. While he hasn’t called for the replacement of Chief Executive Officer David Taylor or a breakup of the company, Peltz did suggest reorganising the maker of Tide and Pampers into three largely autonomous units.
“We are encouraged that shareholders recognise P&G is a profoundly different, much stronger, more profitable company than just a few years ago,” the company said in a statement Tuesday.
P&G has struggled to churn out as many blockbuster products and overcome an alleged culture of bureaucracy. But Peltz’s critiques of the company were dated, Taylor said in an interview last month. P&G is “a very different company today than we were even two or three years ago,” he said.
Peltz bought a $3.5 billion stake in P&G earlier this year before embarking on the board fight.