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Danone came under renewed pressure to shake up its management on Thursday, after a second shareholder criticized the French food and drinks group’s share price performance and urged it to split the chairman and chief executive roles, which are jointly held by Emmanuel Faber.
Artisan Partners said it had amassed a stake of more than 3% in Danone BN, +2.21%, making it the third-largest shareholder, as it called for structural change at the Paris-based company that makes yogurt brands, including Actimel and Activia, as well as Evian bottled water.
The move comes just three weeks after London-based activist investor Bluebell Capital Partners urged Faber to step down, following underperformance of the group’s share price, which it said had been driven “by a combination of poor operational track record and questionable capital allocation choices.” Bluebell also called for the CEO and chairman roles to be separated.
Read: Danone shares rise as activist investor starts piling on the pressure
In a letter sent to Danone independent director Gilles Schnepp, which was made public on Thursday, Artisan said that the group had “one of the best collections of assets in the global food industry,” but its performance, which has lagged behind “on almost every measure” isn’t consistent with the quality of its assets. It added that Danone had not invested enough in innovation, product development and product support.
Shares in Danone, which have fallen by almost 29% over the last 12 months, were up 2.32% in early-afternoon European trading.
Read: Activist Investor Takes Aim at French Food Group Danone. What That Could Mean for the Stock.
Artisan also said it had designed a plan together with consumer industry executive Jan Bennink, who had previously headed up Danone’s dairy business, to help turnaround the group’s performance.
“ “Our plan is based on fundamental, long-term growth and value creation. It is not based on financial engineering, a breakup of the business or the sale of the company.” ”
“Our plan is based on fundamental, long-term growth and value creation. It is not based on financial engineering, a breakup of the business or the sale of the company. It is designed to grow the value of the company for all stakeholders over the medium to long term,” the U.S. fund manager wrote in the letter.
In response, Danone DANOY, +2.47% said in a statement on Thursday that it welcomed “constructive views on how we deliver long-term sustainable value,” adding that it had already taken “significant steps to reinforce its governance.” The group is due to present its full-year results on Feb. 19.
Read: Unilever Pins Growth Hopes on Plant-Based Foods and Beauty. Why the Stock Is Falling.
In November, Faber announced a reorganization aimed at positioning Danone 0KFX, +2.52% for the post-COVID-19 world, including cutting up to 2,000 jobs, or 2% of its global workforce, and carrying out a strategic review of its portfolio of brands. It said this would start with Vega, the plant-based protein powders brand it acquired as part of its $10.4 billion takeover of U.S. organics food producer WhiteWave, as well as €500 million ($680 million) worth of assets in Argentina. Together, the two businesses account for about 2% of group sales.
“Danone is beginning yet another reorganization involving a new structure that has not proven successful at other global food companies,” Artisan said, adding that the group may also be considering mergers or disposals that could further complicate or weaken the business.
