Nestlé shares hit record high

FILE PHOTO: The Nestle logo is seen during the opening of the 151st Annual General Meeting of Nestle in Lausanne

INTERNATIONAL – Shares in food giant Nestlé climbed to a record level yesterday after US activist investor Daniel Loeb announced that he had acquired a 1.25percent stake in the Swiss multinational. 

The stock price of the world’s largest foodmaker rose as high as Sf86 (R1102), 4.75percent more than on the previous trading day. Loeb’s hedge fund Third Point paid around $3.5billion (R44.34bn) to acquire about 40million shares, according to a letter to Nestlé shareholders. 
Activist investors like Loeb are known for increasing shareholder value by putting public pressure on companies. In its letter, Third Point said that Nestlé should sell its 23percent stake in the French cosmetics maker L’Oreal, which would generate funds that could be used to buy back Nestlé shares.