Something unusual is happening in shareholder activism. The grandmaster of the craft, Elliott Investment Management, has set out a strategy to push shares in US consumer icon PepsiCo Inc. up 50%. And yet, for all the hedge fund’s past wins, the stock has fallen. It may be no coincidence that Elliott has on this occasion kept its inner rottweiler on a leash and is seeking change (relatively) politely.
PepsiCo has seen off a powerful activist before when Nelson Peltz called for a breakup more than a decade ago. Its business outside North America is growing nicely. But recent poor performance at home has hit the stock price, reopening the opportunity to push for measures that would catalyze the kind of quick share-price revival that activists seek.