Crunch time

26 June 2017 By Jeffrey Goldfarb Follow @jgfarb

The pushy billionaire has set his sights on the Swiss Alpo-to-Perrier producer. Consumer groups such as P&G and Pepsi have proven tough activist targets. Loeb clearly likes a challenge, having recently agitated in lethargic Japan. And $263 bln Nestle may be a movable mountain.

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Third Point, the hedge fund run by activist investor Dan Loeb, on June 25 disclosed an approximately $3.5 billion stake in Nestle and is urging the Swiss maker of Kit Kat bars and Poland Spring water to sell its 23 percent stake in cosmetics company L'Oreal and to borrow more money to buy back shares.

In a letter to investors, Loeb wrote, "It is rare to find a business of Nestle's quality with so many avenues for improvement." He also said the company should set a formal profit margin target of 18 percent to 20 percent by 2020 to help with productivity.

Nestle said on June 15 it would explore strategic options, including a potential sale, of its U.S. confectionery business.

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