Elliott's Latest Target
Elliott’s choice to target Pernod Ricard has come as a surprise to some industry watchers. 15 February 2019
Elliott’s choice to target Pernod Ricard has come as a surprise to some industry watchers. The company has some governance weaknesses and its margins could be improved, but the stock price has outperformed its closest peer Diageo over most relevant periods. While Pernod Ricard stock has gained 73% in the past five years, Diageo advanced just 24%.
“It was a surprising move. Pernod is considered a fairly well-run company, particularly over the past few years since the appointment of Alexandre Ricard as CEO,” Louis Barbier, a partner at shareholder engagement advisory SquareWell Partners, told me. Barbier also noted that Pernod Ricard represents a low trading risk for Elliott, as the company is likely to continue to perform even in an eventual economic downturn.
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