Dan Loeb’s Third Point builds stake in Colgate, sees value in pet food business in potential spinoff

Investing News

In this article

Daniel Loeb
Simon Dawson | Bloomberg | Getty Images

Dan Loeb’s Third Point has built a sizeable stake in consumer giant Colgate-Palmolive, according to CNBC’s David Faber.

Loeb sees hidden value in Colgate’s subsidiary Hill’s Pet Nutrition, a pet food company, if it were spun off.

The investor believes as a stand-alone business, Hill’s could deliver even faster growth and better margins, and could achieve a valuation close to $20 billion on its 2023 numbers, Loeb will say in a forthcoming investor letter, according to sources.

Colgate has been investing behind its pet food business, its fastest growing unit. Hill’s has always pitched itself as backed by “science,” which from a brand perspective is seen as on trend.

The activist and hedge fund manager added that consolidation in the consumer health sector point to more opportunities for Colgate. Loeb said Colgate could become part of the current M&A “minuet” in consumer health. 

Shares of Colgate jumped more than 3% on Tuesday. The stock is still down about 15% this year.

Articles You May Like

The Three Catalysts Sending Stocks to the Moon
Trump is the most pro-stock market president in history, Wharton’s Jeremy Siegel says
Goldman Sachs: Why individual investors need to look at private investments to further grow wealth
Caligan picks up a stake in Verona Pharma, seeing an opportunity to generate more value
Top Wall Street analysts like these dividend-paying stocks