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Heinz: Dissident investors may have won 1 or 2 seats on board

Daily Staff Report

PITTSBURGH – A group of dissident investors may have enough votes to put one or two of its choices on the H.J. Heinz Co. board, but did not win support for all five of its candidates, according to preliminary voting results, a Heinz spokesman said Wednesday.Billionaire investor Nelson Peltz and his Trian Group, Heinz’s second-largest shareholder, hoped to win up to five seats on the company’s 12-member board as part of a plan to rigorously streamline the company and boost shareholder returns.An attorney for Trian, Dennis Block, accused Heinz of violating a Securities and Exchange Commission rule by announcing preliminary results before voting concluded early Wednesday afternoon.Heinz spokesman Michael Mullen said a preliminary review of the 60 million votes shows “Trian’s attempt to secure a voting bloc of five seats and gain creeping control of the Heinz board has been defeated.” It is possible, however, that one or two of Trian’s nominees were elected to the board, he said.Heinz and Trian will have to wait Sept. 15 until an independent inspector certifies the final votes.”I am optimistic they are not going to get five people on our board. I am optimistic they are not going to get four people on our board. Beyond that, right now, we just don’t have enough information,” said William R. Johnson, Heinz’s chairman, president and chief executive officer.”Regardless of the final outcome of this contest, we will move forward from today constructively and with optimism … because we believe in the company, its powerful brands and, most importantly, its outstanding people,” Johnson said.Trian’s nominees include Peltz, his longtime business partner Peter W. May, his son-in-law Edward P. Garden, golfer Greg Norman and former Snapple executive Michael F. Weinstein.Heinz’s board currently has 12 members, but the company announced a month ago that it would expand it to 14. It has said it is searching for two new board members with consumer marketing and capital markets expertise.Heinz had urged shareholders to re-elect its directors and reject Trian’s five nominees, warning Trian’s strategy would cripple the company. Heinz has touted its own turnaround plan it says was in the works long before Peltz and his partners began accumulating shares earlier this year.The company insists Trian’s nominees were unqualified and failed to meet Heinz’s corporate governance standards. Trian has called the current Heinz directors a “clubby, caretaker board” that has let the company falter and has not adequately invested in its brands.The challengers also point to Heinz’s languishing stock price, which has been the focus of criticism in recent years.Speaking to a packed ballroom at the Pittsburgh Hilton, Peltz and May told shareholders before Wednesday’s annual meeting that Heinz’s products are good, but the company needs support and investment.”Our plan is really very simple” – to increase sales and bring down costs, Peltz said.Peltz said he wanted to put the proxy fight behind him and work with management by “sharing our operational experience and entrepreneurial passion.”If the Trian slate were not elected – which, Peltz called “a remote thought” – Peltz said his group wouldn’t sell its Heinz shares and would “hold management’s feet to the fire.”More than 200,000 proxy cards were mailed to shareholders with instructions to vote with a white card for Heinz or a yellow one for Trian.Trian maintains it wants to work with current Heinz managers and has no plans to wrest control of the company or move it from Pittsburgh, its base for 137 years. But the company, state and local officials and others are skeptical about Trian’s intentions.The potential board shake-up has nonetheless buoyed Heinz’s stock price.Heinz has long been an integral part of Pittsburgh’s landscape, with its name emblazoned on the Steelers’ stadium and other city buildings.Peltz, 63, is known for leading high-profile corporate buyouts. His Triarc Cos. Inc. bought Snapple for about $300 million in 1997 and sold it along with other drink assets in 2000 for $1.5 billion.After the shareholder meeting, Peltz put on a Heinz hat for photographers. The hat was among several items, such as food products, in bags that Heinz handed out to shareholders.Shares of Heinz rose 15 cents to $41.12 in afternoon trading on the New York Stock Exchange.—On the Net:Trian Group: http://www.enhanceheinz.comH.J. Heinz Co.: http://www.heinzsuperiorvalue.com


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