Market Overview

Pentair Stock Shoots Higher On Activist Stake

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Pentair plc. Ordinary Share (NYSE: PNR) was higher by 5 percent in pre-market trading after the Wall Street Journal reported that Trian Fund Management LP, Nelson Peltz's $11 billion hedge fund, built a 7.24 percent stake in the company.

Trian is reportedly asking Pentair to consider buying "rivals in an effort to consolidate the fragmented market for specialized parts," WSJ said.

The stake was revealed in Trian's filings with the Securities and Exchange Commission. Trian also has held positions in E I Du Pont De Nemours And Co (NYSE: DD) and PepsiCo, Inc. (NYSE: PEP), where it pushed for strategic and financial changes.

WSJ also said that "Pentair's CEO appears to be on board with the idea. Mr. Hogan has said he is looking to put the company's hefty cash flow to work on deals that will increase each of its four business lines."

Pentair has $800 million to spend on acquisitions, according to Hogan, who also noted that he might use stock to fund a deal.

Pentair is based in Ireland and the UK, providing it tax advantages over its competitors.

As of Monday's $64.48 closing price, Pentair stock declined 3 percent year-to-date. Prices have declined 11.5 percent over the past 52 weeks and fell 14 percent in 2014 after the stock starting trading in June.

 

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