Activist fund demands departure of Danone CEO Faber

The activist investment fund Bluebell, which acquired stakes in Danone at the end of last year, is calling for the departure of current CEO Emmanuel Faber, dissatisfied with the results he has achieved.

Letter

According to the Financial Times, Bluebell, which bought an undisclosed stake in Danone at the end of 2020, sent a letter to the food company’s management in November asking them to split the positions of CEO and chairman and replace Faber, the current chairman and CEO. Bluebell is a London-based investment fund founded by Francesco Trapani, the former CEO of Bulgari.

In the letter, the fund also refers to Danone’s low share price which is said to have been caused by “a mixture of a poor operational track record and questionable fund allocation choices.” Furthermore, since Faber was at the helm in October 2014, total shareholder return has lagged far behind its larger rivals Nestlé and Unilever, Bluebell adds. On the stock market, the shares lost 27 per cent of their value last year.

When asked to comment on the news, Danone said that “the company’s management team is strongly focusing on delivering long-term sustainable value for shareholders.”

The pressure rises

Faber has been under pressure for some time. Last year, the company’s bottled water division, best known for its brands Evian and Volvic, suffered badly from lockdowns and lost its most profitable sales coming from restaurants and bars. At the same time, costs for raw materials, transport and logistics rose.

The company announced a major reorganisation in October, involving the cutting of 1,500 to 2,000 jobs. There will be a different organisational structure with more autonomy for the regions and fewer management layers. The French concern also plans to cut back on its product portfolio.