(Reuters) - Activist hedge fund Corvex Management owns shares in French food group Danone SA (PA:DANO) worth about $400 million, viewing the world's largest yogurt maker as significantly undervalued, Bloomberg reported late on Monday, citing people familiar with the matter.
The New York-based hedge fund, run by Keith Meister, does not currently plan to publicly push for management changes or launch a proxy fight against the yogurt maker, though the stance could change, according to the report. (https://bloom.bg/2vVwxiE)
On Monday, Corvex warned of a proxy battle at another company, Energen Corp (N:EGN).
The maker of Activia yogurt and Evian water has recently been touted as a potential target by suitors or activist shareholders, given that the company’s profits are below many of its peers and its sales have disappointed. Such a move at Danone would closely follow recent engagement by other activist shareholders at larger rivals Nestle SA (S:NESN) and Procter & Gamble Co (N:PG).
Officials for Corvex and Danone declined to comment.
Danone has not hired advisers to deal with Corvex as it believes the stake is too small to warrant a defense strategy, Financial Times reported, citing people close to the company. (http://on.ft.com/2vCE1o5)
Danone's listed American Depositary Receipts were up nearly 7 percent on Monday. Its Paris-listed shares had earlier closed up more than 2 percent, following a Sunday report from the New York Post citing someone saying Danone could be a takeover target, for the likes of Kraft Heinz Co (O:KHC) or Coca-Cola Co (N:KO).
That echoed similar assertions made recently by analysts such as those at Exane, who said in a June research note that the election of centrist President Emmanuel Macron could make a takeover more likely in a country that had traditionally resisted foreign takeovers of its companies.
In 2005 France dashed to the support of Danone in the face of a rumored bid from PepsiCo Inc (N:PEP), which never actually materialized. (http://reut.rs/2wHZQTw)
Danone Chief Executive Officer Emmanuel Faber has played down the takeover speculation, telling Reuters in June that the company, which has no large controlling shareholder, was "no more and no less than usual" vulnerable to a possible takeover bid.
Analysts have been speculating about activists’ next target, following the June revelation that Dan Loeb's Third Point hedge fund had taken a $3.5 billion stake in Nestle, urging it to more aggressively improve returns, and the campaign by Nelson Peltz at Procter & Gamble, where he is pushing for a board seat.
