Shareholder activism and buyout bids surfaced once again in the second quarter and had more than just a marginal impact on our Fund portfolios. Nestlé (OTCPK:NSRGY)’s surge in June was, in part, a response to the news that Daniel Loeb (Trades, Portfolio), the noted hedge fund manager, had taken a position in the company and remarked that despite the company’s long record of success, there was significant room for improvement. Late in June, Nestlé also announced a planned buyback of shares equal to as much as CHF20 billion. Unilever was also up nicely for the quarter, as speculation continued about a possible renewed bid by Kraft. Elis, the French-based uniform, textile and hygiene company, announced a buyout bid for Berendsen, and the two companies reached agreement on a deal at £12.5 per Berendsen share, or a potential 48% premium to our original cost in the shares. As a result, Berendsen was the best performing stock in the Worldwide High Dividend Yield Value Fund. Other stocks that contributed significantly to the quarter’s results included pharmaceutical holdings, Novartis and Johnson & Johnson.
From Tweedy Browne (Trades, Portfolio)'s second quarter 2017 shareholder commentary.
