market folly

Nelson Peltz's hedge fund firm Trian Partners today released a white paper on PepsiCo (PEP).  The activist investor owns $1.3 billion worth of shares and presented their thesis on PEP in a slideshow.

Trian argues that PepsiCo (PEP) is at a strategic crossroads and they've outlined 2 strategic alternatives to enhance shareholder value at the company.


Option A:  Merge PepsiCo With Mondelez

Merge PEP with Mondelex (MDLZ), creating a global snacks company.  This tie-up could lead to $175 of implied value per PEP share and approximately $72 of implied value per MDLZ share by the end of 2015.  It's also worth pointing out that Trian Partners owns a stake in MDLZ as well.


Option B: Split-Up PepsiCo 

If PEP doesn't pursue MDLZ, they argue the company should separate the snacks and beverages segments.  Under this scenario, they see $136 to $144 of implied value per PEP share by the end of 2015.


Embedded below is the full .pdf of Trian Partners' white paper and Nelson Peltz's analysis of PepsiCo:




You can download a .pdf copy here.

For more on these companies, don't miss Nelson Peltz's thoughts on PEP/MDLZ from the Delivering Alpha Conference today.