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What Is A 'Snake Pit' And Why Should Procter & Gamble Shareholders Care?

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What Is A 'Snake Pit' And Why Should Procter & Gamble Shareholders Care?
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Many investors aren't familiar with the term "snake pit," but for Procter & Gamble Co (NYSE: PG) investors, this term will likely be mentioned often moving forward.

A snake pit is used by participants in a proxy-fight battle to describe the process of investigating contested votes, CNBC explained. After a vote to elect activist investor and P&G shareholder Nelson Peltz to the company's board was too close to call the two sides will now descend into the snake pit.

There is another meaning of the term. After last week's proxy battle was taken to a vote, there is still some "venom to the process," Bruce Goldfarb, founder and chief executive of proxy-solicitation firm Okapi Partners told CNBC.

"You're talking about the end stage of an election campaign, where the parties haven't kissed and made up," he also said.

Mediators and other third parties will now have to verify each and every of the 200,000 paper ballots that were cast by P&G shareholders. Each side will also closely examine the ballot to determine if it was signed properly and for other aspects that would invalidate a vote.

A snake pit situation is indeed very rare and even more so rare for large-cap companies. The last "snake pit" scenario hasn't played out since Hewlett-Packard took over Compaq Computers back in 2002, CNBC noted.

Related Links:

Procter & Gamble CEO: Nelson Peltz's Activist Campaign Is 'Very Dangerous'

Here's Why Procter & Gamble Is Wrong In Pushing Peltz Away

Posted-In: activist investor Bruce GoldfarbCNBC Education Hedge Funds Top Stories Media General Best of Benzinga

 

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