As consumer products giant Procter & Gamble Co. (PG) struggles to revive its revenues and regain market share over the last few years, it has become vulnerable to activist investors hoping to boost value through management shake-ups, spinoffs and other strategic moves.

In the recent period, activists have been putting the heat on struggling industry leaders to make quicker transitions, forcing the resignation of various CEOs including Avon Products Inc.’s (AVP) Sheri McCoy and General Electric Co.’s Jeff Immelt. (See also: Activist Investors Target CEOs for Replacement.)

A Seat at the Table

Cincinnati-based P&G has posted revenue declines for four fiscal years in a row while the company has shed declining businesses including Duracell, Clairol and Covergirl, to reach its current 65 global brands. P&G’s new strategy involves focusing on 10 different categories and decentralizing decision making.

Despite P&G’s efforts, recent events indicate that Nelson Peltz’ Trian Fund Management is getting impatient, ready to shake things up after revealing earlier this year that it had upped its position six-fold to a $3.5 billion stake. The “liquid private equity” focused firm is well known for its active involvement with PepsiCo Inc. (PEP) and Heinz.


Last week, Trian filed a notice for a board seat at P&G, reports CNBC. If Peltz becomes more aggressive, a board battle would dificult for the $231 billion company, marking the largest director-election proxy fight in the U.S. to date. A likely outcome is for Peltz to gain a seat as part of a new arrangement.

The consumer goods maker is also likely to consider spinning off less profitable businesses such as its beauty division and its over-the-counter business as it cuts costs above its current five-year $10 billion target and is pressured to increase shareholder distributions. (See also: P&G CEO Says It is in ‘Ongoing Constructive, Active Talks’ with Activist Trian.)

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