jay21 Posted September 3, 2013 Author Share Posted September 3, 2013 I think the value of MDLZ lies in its brands -- some of the best brands in the F&B space. These are brands that are likely to be around 20, 30 years from now. Whether or not you believe Trian's values, it seems to me that the brands are enormously valuable. There's probably something to the thought that sustainable cash flow can be used to lock in low-cost leverage as is available currently...similar what is being done @ HNZ. Over the longer-term, MDLZ's brands probably confer pricing power as well. It's not without hair though. You can look at those margins and either think of it as a weakness or an opportunity. I think margin expansion is a definite opportunity. Cadbury I believe has a large % of sales from Europe so some of that opportunity lies in waiting for Europe to turn so they can get some price increases there. Obviously, there are some other opportunities that are uncorrelated to the economy, but those depend on management execution, which is probably the weakest part of the thesis. I hope with Peltz meeting with management he gets them focused on this area. Good to see them put actual targets on this opportunity: http://finance.yahoo.com/news/mondelez-international-drives-margin-expansion-121500755.html "At the Barclays Capital Back to School Consumer Conference today, executives of Mondelez International (MDLZ) highlighted initiatives to redesign the company's supply chain that are expected to deliver over the next three years $3 billion in gross productivity savings, $1.5 billion in net productivity and $1 billion in incremental cash. These savings will be the primary driver of an approximately 60-to-90 basis-point annual improvement in base operating income margin. " "In North America, we're targeting a 500-basis-point improvement in operating income margin, and we now expect to reach that target by 2016, a year earlier than originally anticipated," said Chairman and CEO Irene Rosenfeld. "In Europe, we're targeting an improvement of 250 basis points in OI margin, which we also expect to reach by 2016." Link to comment Share on other sites More sharing options...
CorpRaider Posted January 21, 2014 Share Posted January 21, 2014 Looks like Peltz is dropping his push for a sale to PEP. Hope the stock drops back to below 30, where it was when he first went public with his Plan to sell for PEP stock @ a mid-teens premium. http://www.bloomberg.com/news/2014-01-21/mondelez-international-adds-investor-nelson-peltz-to-its-board.html Link to comment Share on other sites More sharing options...
bmichaud Posted January 21, 2014 Share Posted January 21, 2014 Just to add... Sorkin reported that Peltz will continue to work with Pepsi on a possible merger. Link to comment Share on other sites More sharing options...
cr6196 Posted January 21, 2014 Share Posted January 21, 2014 Just to add... Sorkin reported that Peltz will continue to work with Pepsi on a possible merger. Yep, I suspect the lull has been due to the upcoming strategy announcement for PEP. The expectation is for more cost cuts, so basically management buying time hoping that Beverages bounces back. This time will run out eventually though and when it does these issues will come back on the table. Link to comment Share on other sites More sharing options...
VersaillesinNY Posted February 24, 2014 Share Posted February 24, 2014 Under Irene Rosenfeld's leadership, Mondelez has performed well. Four years after eating Cadbury, will she be receiving her congratulatory card from Warren Buffett? With Nelson Peltz's help, will she be able to merge Mondelez and Frito-Lay? No doubt this woman has some character, here are her tips in order to "make a difference": ------------------ "Q: Irene, why on earth do you want to run a company [Kraft] that is smaller [Mondelez] than the one you run today? A: When will you guys ever understand that size is not the be-all animal" Link to comment Share on other sites More sharing options...
jay21 Posted May 7, 2014 Author Share Posted May 7, 2014 Mondelez and D.E. Master Blenders will link their coffee businesses together as Mondelez concentrates increasingly on its snack foods division and cost cutting. Mondelez will receive about $5 billion when the transaction closes and have a 49 percent equity stake in the new company. Mondelez said that it plans to use most of the proceeds to expand its stock repurchases and anticipates using the balance to help lower debt and other things. http://finance.yahoo.com/news/mondelez-master-combining-coffee-businesses-113056650.html I was just thinking about selling this too. Link to comment Share on other sites More sharing options...
VersaillesinNY Posted May 27, 2014 Share Posted May 27, 2014 "A Conversation with Irene Rosenfeld" - May 1, 2014 - Yale School Of Management This woman is brilliant. -------------------- PS: You can use A Tube catcher freeware in order to transform YouTube videos into mp3 or any audio format. Link to comment Share on other sites More sharing options...
Liberty Posted August 6, 2015 Share Posted August 6, 2015 Ackman takes a 5.5 billion position: http://www.wsj.com/articles/activist-takes-5-5-billion-stake-in-snacks-giant-mondelez-1438825313 Link to comment Share on other sites More sharing options...
jawn619 Posted August 6, 2015 Share Posted August 6, 2015 Ackman takes a 5.5 billion position: http://www.wsj.com/articles/activist-takes-5-5-billion-stake-in-snacks-giant-mondelez-1438825313 My first thought is .... wow that's a high price to pay....and that's a large position relative to AUM. But I think i might understand what they were thinking. A. Mondelez's revenues/income are extremely stable. B. The investment is structured largely through call options. That means leverage...and lots of it. It can be argued that Buffett's success came from owning largely stable companies with consistent cash flows, then levered it up through insurance float. I see this as an homage to Buffett and think this investment is very creative. The leverage they take out is non recourse, and that means something when the thing you're buying has stable cash flows. Link to comment Share on other sites More sharing options...
berkshire101 Posted August 6, 2015 Share Posted August 6, 2015 Revenue has been flat for several years. What can they do to boost sales except through acquisitions? Cost cutting can only get you so far in the long run. What does ackman see that I don't? I feel like buying MDLZ just because Ackman is buying too. But at like 25 times earning. If sales don't increase and you cut cost it might not trade at that multiple in the future. Link to comment Share on other sites More sharing options...
TwoCitiesCapital Posted August 6, 2015 Share Posted August 6, 2015 The speculation I've seen is a re-merger with Kraft from RBS. Don't know enough about it to really be able to say if that would fly, or if Kraft would bite, but if they could push that through in relatively quick order then Ackman might look like a genius and the company would end up right where it started just a few years back. Link to comment Share on other sites More sharing options...
Phaceliacapital Posted August 6, 2015 Share Posted August 6, 2015 How would that deal impact Peltz? This guy told them to split into two in the first place, and he is still on the board. Would he allow for a remerger? Mondelez already says it implemented (is implementing) ZBB but that's currently not really noticeable in the numbers. Perhaps Bill & Peltz had a nice summer bbq chat at the Hamptons? Link to comment Share on other sites More sharing options...
berkshire101 Posted August 6, 2015 Share Posted August 6, 2015 Ackman didn't really have much success with PG. He tried to implement the same thing and ended up kicking out the CEO and bringing back AG. But PG is still struggling to grow. I think these companies are just too big to really grow much further. Their products are everywhere so growing sales organically is going to be difficult unless the economy really picks up. Other than that it's more financial engineering with cutting cost, share buybacks, and acquisitions. Link to comment Share on other sites More sharing options...
Jurgis Posted August 6, 2015 Share Posted August 6, 2015 I don't see the value at current price. Maybe Ackman will work it out. We'll see. Link to comment Share on other sites More sharing options...
Picasso Posted August 6, 2015 Share Posted August 6, 2015 I think Ackman has a fairly good strategy these days. He can take a large position in something which he has some influence over (whether it is PG or ZTS) and if it doesn't work out, well it's liquid enough to sell and he probably won't take a big hit. Just the news of his position will push up the value. In this case it seems like the market isn't that impressed. Link to comment Share on other sites More sharing options...
Liberty Posted August 10, 2015 Share Posted August 10, 2015 Becky Quick: "Warren Buffett shoots down Ackman's idea that Kraft Heinz would buy Mondelez, at least in the next few years." Link to comment Share on other sites More sharing options...
Liberty Posted August 10, 2015 Share Posted August 10, 2015 http://brooklyninvestor.blogspot.ca/2015/08/mondelez-international-mdlz.html Link to comment Share on other sites More sharing options...
VersaillesinNY Posted October 14, 2015 Share Posted October 14, 2015 CEO Irene Rosenfeld speaks on the future of Mondelēz International | Fortune's Most Powerful Women Link to comment Share on other sites More sharing options...
Guest Schwab711 Posted October 14, 2015 Share Posted October 14, 2015 Becky Quick: "Warren Buffett shoots down Ackman's idea that Kraft Heinz would buy Mondelez, at least in the next few years." [rant] I imagine WEB laughs any time Ackman is described as a "value investor". Ackman pushes for Kraft to split 4 years ago to better "recognize Kraft's value". Now, he is pushing them to combine again? It's such a waste of long term shareholder money! This "activist investor" nonsense is a joke and I can't wait for this trend to end. It rarely creates "value" and I wish companies would stop listening to these guys unless they agreed to hold for a long period. http://www.minyanville.com/businessmarkets/articles/Kraft-food-bill-ackman-pershing-square/8/5/2011/id/36152 [/rant] Link to comment Share on other sites More sharing options...
Picasso Posted October 14, 2015 Share Posted October 14, 2015 In Ackman's defense, the Kraft split allowed 3G to do a recap of the lesser quality Kraft split which would not have been a possibility before. Also there is now a lot of pressure on MDLZ to either do well on their own or merge with someone else like KHC. So arguably the value from the split is actually visible today whereas it wasnt before (of course a lot of leverage and cost cutting has been involved). Even Warren complained about how bad Kraft was at some of their capital allocation decisions presplit. That said, yeah some of this activism is pushing the limits on what's best for shareholders. But these are big companies and the rest of the shareholder base has to agree with the activist in some sense. Link to comment Share on other sites More sharing options...
Happy Posted November 18, 2015 Share Posted November 18, 2015 http://www.reuters.com/article/2015/08/07/us-mondelez-intl-stake-ackman-idUSKCN0QB04020150807 Ackman was said to have invested about $5.5 bn in Mondelez. The Q3 13-F shows 43.37 million shares at a price of $41.87 per share, which nets out to about $1.8 bn. "Pershing Square said on Wednesday it held a 7.5 percent stake in Deerfield, Illinois-based Mondelez, including forward purchase contracts and call options." Is it because the forward purchase contracts and call options are not exercised yet and therefore don't appear in the 13-F? Link to comment Share on other sites More sharing options...
fareastwarriors Posted December 16, 2015 Share Posted December 16, 2015 Activists Put Mondelez CEO Irene Rosenfeld on the Spot Mondelez boss Irene Rosenfeld hears often from investors Nelson Peltz and Bill Ackman http://www.wsj.com/articles/two-activists-put-one-ceo-on-the-spot-1450230598 Link to comment Share on other sites More sharing options...
phil_Buffett Posted July 1, 2016 Share Posted July 1, 2016 http://www.reuters.com/article/us-hershey-m-a-mondelez-intl-idUSKCN0ZG24O i think hershey could be a good fit Link to comment Share on other sites More sharing options...
CorpRaider Posted July 1, 2016 Share Posted July 1, 2016 Yeah, this is interesting to follow. HSY holds what appears to be a permanent license (from old press accounts I've found concerning the 1988 acquisition of the Cadbury U.S. business) to the Cadbury and associated chocolate brands in the U.S. I don't think that includes Toblerone, but not sure. They also apparently hold Kit-Kat license but that reverts to Nestle on a change in control. Ideally MDLZ could enlist Nestle in a joint bid/operation since a lot of the value goes "poof" if anyone else takes over HSY. Maybe Nestle takes the lead and mdlz kicks in some cash to get back the Cadbury rights and mitigate antitrust concerns. Maybe I should go pitch that like that movie from the 80's where the secretary teams up with Harrison Ford to become an investment banker. Man, the 80s were awesome. Was hoping MDLZ would get smoked by Brexit due to massive non-us dollar revenue exposures. Instead they make a massive bid and +6%... Link to comment Share on other sites More sharing options...
fareastwarriors Posted July 11, 2016 Share Posted July 11, 2016 Board Resignation at Hershey Trust Adds Uncertainty in Face of Mondelez Pursuit Any deal would require approval of trust that holds 81% of voting power at chocolate maker http://www.wsj.com/articles/board-resignation-at-hershey-trust-adds-uncertainty-in-face-of-mondelez-pursuit-1468265864 Link to comment Share on other sites More sharing options...
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