US firms quick at cutting deals with activists

New York

EARLY in August, a call came into Sysco Corp from Trian Fund Management LP, warning the food distributor that the activist hedge fund was about to disclose a large stake in the company.

Trian, run by veteran investor Nelson Peltz, unveiled its 7.1 per cent stake in Sysco on Aug 14, and asked for board representation and for the Houston-based company to improve its profitability and return money to shareholders.

Six days later, Sysco awarded two board seats to Trian.

For Sysco, it was better to reach a quick agreement than risk a drawn-out battle, a sentiment increasingly felt across Corporate America. "That's a significant amount of shares (owned by Trian), and we're at a key point in the business right now, and really, they have a histo…