PITTSBURGH -- H.J. Heinz Co. yesterday received a proposed growth strategy from a group of shareholders led by billionaire investor Nelson Peltz, who has sought to pressure the food maker into boosting returns.
Investment firms Trian Fund Management LP and Sandell Asset Management Group outlined the proposal in a filing with the Securities and Exchange Commission.
They own about 5.4 percent of the company's stock.
Their idea calls for the Pittsburgh-based company to cut annual costs by $575 million and reduce deals, allowances, and other incentives to retailers by at least $300 million.
It also recommends a stronger focus on core brands and international markets, returning capital through share repurchases, and higher long-term dividends.
The filing said Heinz is one of the world's most valuable brands, but the company's shareholder returns have lagged behind the market since the current management team took over in 1998.
``The company's board should establish a strategic vision that puts an end to the frantic activity of divestitures, acquisitions, and restructurings that have been so damaging over the last eight years," it said.
Heinz shares shot up $2.05 to a 52-week high of $42.98 on the New York Stock Exchange.
The company said in a statement that its response to the proposal ``will be based on the board of directors' evaluation of Mr. Peltz's views, his record, and what is in the best interest of all Heinz shareholders."
The development came one day after Heinz said it would disclose a share buyback program and an advertising and innovation campaign for its top brands on June 1, when the company reports quarterly earnings, in an effort to boost profits over the next two years.
Michael Mullen, a Heinz spokesman, said the board ``welcomes a debate on the proposals, but the debate needs to be based on facts, not fiction."