Wall Street Buzzing on Procter & Gamble (PG) as Ackman Gets His Meathooks In

July 12, 2012 1:34 PM EDT
Shares of Procter & Gamble Co. (NYSE: PG) are surging over 4 percent Thursday as Wall Street is buzzing about Bill Ackman's new stake in the company.

An FTC filing dated June 11th showed Ackman's Pershing Square Capital hedge fund has been granted early termination for a transaction involving P&G. The filing suggests Ackman has now built a notable stake in the company, although the details of that stake remain undisclosed. Since Ackman's stake may involve changing control, the FTC clearance may have been necessary or advised by Ackman's lawyers.

If Ackman builds a stake larger than 5 percent he would be required to file a 13D with the SEC. But at this time no such filing exists. It may never, as building a 5 percent or more stake in a $175 billion company - even on leverage - may be out of Ackman's range.

P&G shares have underperformed peers, so investors are reacting positivity to any changes that Ackman can bring.

Bernstein analyst Ali Dibadj said Ackman's stake may galvanize frustrated investors. He sees investors rallying around a plan that would focus on cost cutting, expanding in retail markets, a board or management shake up and/or break up of the company.

P&G said they are open to ideas. CFO Jon Moeller told the WSJ today, "We welcome listening and learning from any investor."

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