Elliott Management has called on its family backed French drinks company in-order to elevate the margins of profit and improve the returns for investors in its recently acquired stake in Pernod Richard or the PERP.PA .
On Wednesday Elliott announced that its complete stake in the company Pernod Ricard is of 2.5 percent and it is its very first holding in a blue chip company of France which is worth some 930 million euros which is equivalent to about $1.05 million.
Elliott which is a New York based company, has around 35 billion dollars under management and holds a stark track record of pushing hard and fast for change in companies.
The company said that Pernod has an outstanding portfolio of brands and is even one of the major attractive investment opportunities present in the current industry.
Elliott accepted that the lack of outside perceptive combined with an environment of inadequate corporate governance had been the two major reasons that contributed to the company’s under-performance.
However it Elliott suggested that some operational and governance improvements could allow the company to unfold most of the actual value that the company is capable of delivering.
United States is Pernod’s biggest market by sales and it is even considered as the world’s most profitable market.
Pernod Ricard is basically a French company that produces distilled beverages and once ii is tagged as the world’s second largest wine and spirits seller.
It was created by the merge of Pernod Anise and Ricard Pastis the two French anise based spirit makers in 1975 and therefore is referred by name Pernod Ricard.
Elliott accepted the fact that despite being the world’s second largest drinks maker as Britains Diageo owns the first position, company had lost its market shares across the key areas and has definitely under-performed as compared to its rivals on operating margins and total shareholder returns.
Source: Reuters, Fortune
