Raider Nelson Peltz bought a piece of Kraft Foods Inc. (NYSE: KFT). The shares went up some and then settled back. He wants to streamline the company, sell off underperforming assets, and make better use of cash. That is pretty much a canned speech for Nelson and his peers.
Yesterday, Kraft's CEO said she she would meet with Nelson. He can share all of his plans, most of which have probably occurred to the board already.
At the same time the company announced that it would have the meeting, the press found out that Carl Icahn has a stake in the company. It's not clear yet what his plans are, but he probably did not buy shares because he likes the artwork on the stock certificates. Kraft jumped 3% late in the day on Friday.
The news put Kraft into a rare position. If Peltz and Icahn have different goals for the company, it may actually be easier to turn them both down. Kraft can't do everything for everyone. But, if the two old hands decide to take the same path to getting the company to cough up cash for a share buyback or special dividend, Kraft has a problem.
Douglas A. McIntyre is a partner at 24/7 Wall St.
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Reader Comments (Page 1 of 1)
7-14-2007 @ 5:42PM
Michael Schneider said...
It's interesting that Carl Icahn followed Nelson Peltz into Kraft Foods a short time after following Warren Buffett into railroad stocks. Could be he is piggybacking-- of course he has his own standards but perhaps the billionaires are like everybody else keeping an eye on what their peers are doing. Kraft has many brands that need to be revitalized-- yet they also are a kind of 1950s diet of rather high fat, sodium, and limited nutrition stuff like Velvetta cheese and Jello so there is some question as to what the big attraction is. However, when smart investors buy it is something you don't want to fight.
Items on Carl Icahn and other billionaire investors are available in the Billionaire watch section (yellow label, top) at http://www.Barrelomoney.com. There is a profile of Nelson Peltz in an item about his Tribune escapade at http://www.Barrelomedia.com.