PRAGUE, Sept. 5, 2018 /PRNewswire/ -- Krupa Global Investments ("KGI"), one of the largest institutional shareholders of The Kraft Heinz Company, has organized demonstrations involving concerned shareholders and others this week outside the offices of Warren Buffett in Omaha and outside the offices of 3G Capital in New York to inform the two largest shareholders in Kraft Heinz that investors deserve better. KGI currently owns approximately $100 Million worth of Kraft Heinz stock.
Specifically, KGI contends that 3G Capital, which currently manages Kraft Heinz and owns approximately 22% of the firm, has cut costs excessively at the expense of market share while failing to make strategic acquisitions to adapt to changing consumer behaviors. KGI also contends that Warren Buffett's failure to take an active role in Kraft Heinz, including his decision to step down from the board earlier this year, has further stunted growth and deterred investors. Buffett, through Berkshire Hathaway, owns in excess of 25% of Kraft Heinz. Kraft Heinz stock is down approximately 30% since the firm's 2015 IPO.
"Both Berkshire Hathaway and 3G Capital have well-regarded reputations around the world, however, they have let Kraft Heinz, one of their largest investments continue to decrease in value year over year. The fact that Kraft Heinz employees have lost their jobs and investors have lost their retirement accounts should serve as a wake-up call to both Berkshire Hathaway and 3G Capital that immediate action and attention is needed. Instead, 3G Capital has reduced its stake while Buffett has left the board. Employees and Investors need BOTH firms to step up and make the necessary moves to increase shareholder value and preserve this iconic brand for generations to come," said Pavol Krupa, Chairman of Krupa Global Investments.
FKGI is asking both Berkshire Hathaway and 3G Capital and other investors to boost their stakes to inject more capital into Kraft Heinz. Additionally, KGI believes that Kraft Heinz must make strategic moves such as acquiring popular pre-made meal companies and health food companies that are high margin and more in tune with modern consumer trends. Moreover, KGI is asking management to institute a stock buyback program to illustrate to investors that Kraft Heinz's low stock price makes it an obvious value investment. Ultimately, KGI strongly believes that Kraft Heinz should be taken private by Berkshire Hathaway and 3G Capital at a fair valuation to allow the company to make long-term investments which are necessary for growth but difficult to justify amidst day to day stock market pressures. KGI does not make generally view "going private" transactions favorably, however, Kraft Heinz presents an ideal case for a fair value privatization considering the significant capital intensive investments needed and the strong track record of both Berkshire Hathaway and 3G Capital.
KGI has outlined further details of its proposals in an open letter directed at board members and fellow shareholders. That letter can be found here: http://www.krupainvestments.com/content/uploads/2018/09/kgikgi-releases-open-letter-to-kraft-heinz-board-members-and-shareholders4-9-2018.pdf
KGI is reaching out directly to both parties as well as other significant investors and to management to discuss further details and outline a plan for success at Kraft Heinz.
Krupa Global Investments is known for taking an activist approach in leveraging necessary reforms at fundamentally strong companies. Pavol Krupa, Chairman of Krupa Global Investments, is known for his unwavering support of ordinary investors, having made his fortune fighting for good corporate governance in Central and Eastern Europe. "Our philosophy is to take substantial stakes in fundamentally strong companies and to campaign for necessary reforms. Once we start a campaign, we never back down because true reforms and change can only be accomplished through unwavering commitments. It is through this unwavering stance that we have delivered strong returns year after year while also helping investors realize billions of dollars in profits through our actions," said Krupa.
About Krupa Global Investments:
Krúpa Global Investments, previously known as Arca Capital, is a private investment group with a focus on energy, real estate, retail and service activities, as well as regulated activities focused on building and managing fund structures focusing on energy, real estate and financial services. It is named after its founder and chairman, Pavol Krupa. The firm takes an activist approach, with the goal of remedying and eliminating management actions that have a negative impact on companies, and with the goal of achieving significant positive change in strategy, financial structure or management. The firm has fought and won many successful battles and in so doing has streamline companies and realize hundreds of millions in shareholder value.
Contact for media:
Mgr. Barbora Hanáková
+420 776 575 096
Krupa Global Investments a.s.
140 00 Prague 4
SOURCE Krupa Global Investments