(Reuters) — Nelson Peltz’s Trian Fund Management said it has bought $2.5 billion in General Electric (GE.N) shares since May, making it one of the company’s top 10 shareholders.
With a beneficial ownership of 98.5 million GE shares, the company is now Trian’s largest investment, the activist investor firm said in a statement on Monday.
Trian, which now has a roughly 1 percent stake in GE, has not asked GE for a board seat, but it has called for GE to step up cost cuts, consider getting rid of even more of its finance arm and be more cautious on acquisitions.
“Trian believes GE has significant long-term potential and that its implied target value per share, including dividends, could be $40 to $45 by the end of 2017 based on our view that GE can deliver EPS of at least $2.20 in 2018,” Ed Garden, chief investment officer of Trian said.
GE shares closed at $25.47 on Friday on the New York Stock Exchange.
The U.S. conglomerate said in April it would seek to sell some $200 billion of its GE Capital assets as it moves away from financial services and focuses more on manufacturing jet engines, power turbines and other big-ticket industrial equipment.
Over the past couple of years, Peltz has targeted DuPont (DD.N) and PepsiCo Inc (PEP.N) among others, demanding board seats and asking them to separate their fast-growing businesses from the ones where growth had stagnated.
Prior to the wave of activist campaigns during the last few years, companies often resisted the approach of activist hedge funds, thwarting their efforts to shake-up management or restructure their businesses. But the growing cash piles and clout amassed by activists have granted them more board access.
(Reporting by Supriya Kurane and Amrutha Gayathri in Bengaluru; Editing by Anupama Dwivedi and Savio D’Souza)