Activist investor Bill Ackman appears ready to shake up management at yet another major company, building a stake in U.S. household products company Procter & Gamble Co., a person familiar with the matter said.
Mr. Ackman’s Pershing Square Capital Management LP has been building a position in P&G for the last few weeks and may grow its stake further, said the source who was not permitted to speak publicly.
Word that the well-known activist investor is now circling the company pushed its share price up nearly 4 per cent. P&G could not be immediately reached for comment.
News of Mr. Ackman’s stake comes just weeks after P&G chairman and chief executive officer Bob McDonald frankly acknowledged that the company needs to do better as analysts have long criticized its high costs and the lack of popular new products.
The economic crisis has hit P&G, the maker of Tide laundry detergent, Gillette razors, and Pampers diapers, harder than some of its rivals like Colgate-Palmolive Co., analysts have said.
P&G’s share price, which had been lagging for months, was up 4.3 per cent to $64.03 (U.S.) in early afternoon trading on Thursday as word spread that Mr. Ackman was buying shares.
For Mr. Ackman a play in P&G would mark one of the biggest activist campaigns ever for his $10-billion New York-based fund where he is known for taking big concentrated positions that often work out but sometimes fail. Through the first six months of the year, his fund gained roughly 2 per cent as losses in retailer J.C. Penney Co. Inc. have weighed on returns.
At P&G, Mr. Ackman would be in the company of other big-name investors including billionaire Warren Buffett whose Berkshire Hathaway Inc. is one of the top five shareholders.
Mr. Ackman arrives on the scene of P&G fresh from several big victories where he was able to shake up management.
At Canadian Pacific Railway Ltd., Canada’s No. 2 railway, he recently won a proxy contest and helped install a new CEO. At J.C. Penney he was instrumental in attracting new management to the ailing retailer.