Activist fund to get new Pentair board seat
Pump and valve maker Pentair PLC announced last week that it would ask shareholders to approve a proposal to increase the size of its board of directors by one and appoint a member of New York activist hedge fund Trian Management to the new vacancy.
On June 30, Trian Fund Management, a multibillion-dollar alternative investment management firm, disclosed in a Securities and Exchange Commission filing that it had acquired a 7.2 percent stake in Pentair. In the filing, Trian announced it had been in discussions with Pentair management to be more aggressive in pursuing mergers and acquisitions and disclosed it might also seek board representation.
The proposal to increase the size of the board seems to be a formality. According to Pentair and Trian's most recent SEC filings, Pentair promised in a letter of agreement that it would recommend shareholders approve the proposal and that Edward Garden, chief investment officer and founder partner of Trian, be elected to fill the spot.
Trian is among the activist investment funds that are increasingly asking to have more representation in the companies that they invest in. On Aug. 14 it announced a 7.1 percent stake in Houston, Texas-based food distributor Sysco Corp., and less than two weeks later Sysco announced it would increase its board by two members and that two Trian partners, Nelson Peltz and Joshua Frank, would fill those seats.
Seamless transition seen for St. Jude
Last week Little Canada-based St. Jude Medical Inc. announced that Dan Starks would retire as president and CEO at the end of the year and that longtime St. Jude executive Michael Rousseau would succeed Starks in those roles. Starks will remain executive chairman.
The news seemed to be the logical choice for at least one analyst. Danielle Antalffy from Leerink wrote last week "we believe Rousseau's transition to the role of CEO should be largely seamless. And Rousseau may even bring an increased focus on cost-savings to the table — something on which he was very focused as COO."
The timing of the CEO transition also seems to have quieted some takeover rumors. "A transition at this time largely takes an acquisition by ABT [Abbott Laboratories] off the table, in our view," Antalffy wrote. "Still, we'd note that ABT has gone on record definitively denying any potential takeout of STJ."