Bill Ackman's Pershing Square Takes Mondelez Stake

Bill Ackman's activist hedge fund Pershing Square Capital has filed a 13D with the SEC regarding shares of Mondelez (MDLZ).  Per the filing, Pershing Square owns 7.5% of Mondelez with over 120.26 million shares.  This is a newly disclosed position.

The filing indicates they sold puts and bought call options in late June and early July and they also bought common stock.

It also says that as of August 6th, Pershing own over 64.8 million over the counter forward purchase contracts with a net purchase price of over $2.5 billion with Nomura as a counterparty. There's quite a few transactions and you can view them here.

The 13D also contains the normal activist boilerplate that they intend to engage with management.

Mondelez was spun-off from the original Kraft entity and represents more of the 'snacks and sweets' business.

The standalone Kraft Foods, on the other hand, is mainly their branded foods consumer staples company.  KRFT merged with Heinz recently under the guidance of 3G Capital and Berkshire Hathaway.  So now you have activists at both of the entities.

For more on Pershing Square, head to Bill Ackman's comments at the recent Delivering Alpha conference.

Warren Buffett Files Form 3 on Kraft Heinz (KHC)

Berkshire Hathaway's Warren Buffett has filed a Form 3 with the SEC regarding his position in Kraft Heinz (KHC).  Per the filing, Buffett's entities have disclosed ownership of 325,634,818 shares of common stock and 80,000 shares of 9.00% cumulative compounding preferred stock series A.

H.J. Heinz (former ticker HNZ) and Kraft Foods (former ticker KRFT) completed their merger recently and shares just began trading as a merged company under symbol KHC.  It's up 2% on its first day of trading.

Bill Ackman's Pershing Square Discloses Mondelez Position

Bill Ackman's hedge fund firm Pershing Square Capital Management just filed an amended 13F with the SEC regarding their portfolio as of the end of 2012.  In it, they add a new holding entry: Mondelez International (MDLZ). 

As of December 31st, Pershing Square reports owning 5,978,214 shares.  This is a small position (worth around $179 million) compared to the rest of Pershing's portfolio, but is still worth mentioning as it's a new disclosure.

Last year, Kraft (former ticker KFT) split up into Kraft Foods (new ticker KRFT) and Mondelez International (new ticker MDLZ).  KRFT houses Kraft's North American grocery business and is seen as a steady cashflow generating, dividend income-type stock.  MDLZ, on the other hand, is seen as the growth engine, housing the snacks business with international exposure.

Pershing Square has not disclosed a position in KRFT and only has revealed their stake in the post-split shares of MDLZ.


Ackman Owned Kraft in the Past

This will not be the first time Ackman's hedge fund has had exposure to a Kraft entity.  In fact, he even published a presentation on Kraft back in 2010.  Interestingly, Pershing Square owned Kraft shares before the split but sold their entire stake in the former Kraft entity in the second quarter of 2012.   Ackman dumped shares sometime between March 30th and June 30th.

What's unclear, however, is if Ackman re-bought into the old Kraft entity before the split and received his MDLZ shares that way, or if he simply bought shares in the open market after the split was complete.  Regardless, he owned MDLZ shares at the end of 2012 and has just now revealed this via an amended 13F filing.


Other Hedge Funds That Own Mondelez

After the Kraft split, we've seen some hedge funds take large positions in the emerging markets-focused snack maker.  At the end of 2012, James Crichton and Adam Weiss's hedge fund Scout Capital was one of the largest institutional owners of MDLZ with over 27.5 million shares.  This was their largest position at the time, though there's no way to know if it still is.

Additionally, Nelson Peltz's firm Trian Fund Management has reportedly taken a stake in Mondelez (as well as PepsiCo) on speculation that he was possibly trying to merge the two entities together.  The Daily Telegraph reported that Peltz had spent $2 billion on shares of both companies.

However, it is definitely worth mentioning that back in the fourth quarter of 2012, Peltz's investment vehicle had sold completely out of its stake in MDLZ (as they did not disclose a position in their Q4 13F filing).  So while Peltz could have reversed course since then, he did not report ownership of a MDLZ stake as of December 31st.


About Mondelez

Per Google Finance, Mondelez is "is a maker of chocolate, biscuits, gum, candy, coffee and powdered beverages. The Company consists of the global snacking and food brands. Mondelez International's portfolio includes several brands, such as Cadbury and Milka chocolate, Jacobs coffee, LU, Nabisco and Oreo biscuits, Tang powdered beverages and Trident gums. The Company’s products include chocolates, cookies, gums, beverages and crackers. Alpen Gold is a chocolate brand in Russia. Alpen Gold is available in chocolate bars, boxed chocolates and creamy, mouth-watering pralines. Its markets include Poland, Russia and Ukraine. Bubbaloo is a gum brand sold in more than 25 countries and three different continents, including India, Mexico, Portugal and Spain. Belvita are breakfast biscuits made with wholegrain, cereals and fiber. It is sold in Belgium, France, Netherlands, United Kingdom and the United States."

For more on Pershing Square, head to our coverage of Bill Ackman's other positions.