Shareholder activist firm Relational Investors has bought $600 million of PepsiCo (NYSE: PEP) shares according to The Wall Street Journal. Large companies are not immune from the kind of attacks recently experience by AOL (NYSE: AOL) and Yahoo! (NASDAQ: YHOO).
The market has been concerned about the stewardship of Pepsi CEO Indra Nooyi for some time. Soda sales have dropped in many parts of the world, in part because of health concerns. That has caused Pepsi and rival Coca-Cola (NYSE: KO) to rely more on sales of bottled water, non-carbinated drinks, and snacks. Soda sales have been so huge for so long that replacing them is almost impossible.
PepsiCo is too large for almost any one shareholder to attack. Its market capitalization is over $100 billion, so the Relational Investors position is inconsequential, whether the group has reasonable concerns or not.
Douglas A. McIntyre