Nelson Peltz's Trian Fund Goes Activist on Ingersoll-Rand (IR) ~ market folly

Wednesday, May 9, 2012

Nelson Peltz's Trian Fund Goes Activist on Ingersoll-Rand (IR)

Nelson Peltz's Trian Fund Management just filed a 13D with the SEC and revealed a brand new position in Ingersoll-Rand (IR).  Per the filing and as of May 8th, they now own 7.33% of the company with 21,885,406 shares.

Of this stake, 14 million shares are common stock and 7.6 million shares are represented by options.  The started building their position in March and have continued buying into May at prices ranging from the high $39.xx to mid $42.xx

Trian has filed this 13D jointly with the California State Teachers' Retirement System.  As to why Trian acquired they stake, they write:

"(IR) has an attractive collection of businesses, total shareholder returns and profitability have lagged peers, and that there is an opportunity to enhance shareholder value by improving certain key financial, operational, compensation and corporate governance metrics and by considering various strategic alternatives, including a restructuring of its key business segments."

They're seeking addition of new directors to the board, to improve operating margins, and for the company to use "prudent" amounts of leverage to increase the company's stock buyback program.

In Trian's recent letter to investors, they mentioned they've built up 3 new core positions and that they would be publicly revealing them soon.  Ingersoll-Rand is one of them, so we'll have to wait and see what the other two are.

Per Google Finance, Ingersoll-Rand is "a diversified, global company that provides products, services and solutions to enhance the comfort of air in homes and buildings, transport and protect food and perishables, secure homes and commercial properties. IR-Ireland operates in four business segments: Climate Solutions, Residential Solutions, Industrial Technologies and Security Technologies."

Read Trian's commentary on their other positions here.

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