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  • June 2013 (Revised September 2015)
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Procter & Gamble

By: Jay W. Lorsch and Kathleen Durante
  • Format:Print
  • | Language:English
  • | Pages:2
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Abstract

On July 12, 2012, Bill Ackman's Pershing Square Capital Management announced publicly that it had purchased about $2 billion of Procter and Gamble (P&G) stock. Shares in the company closed up 3.75% the day the disclosure was made public. Ackman told the New York Times that Pershing would be a major P&G shareholder. "We think it's an underrated stock," he said. "We think there is a lot of great opportunity there."

During the next several months there was little or no public discussion of the matter although people familiar with the situation reported that Ackman held conversations with P&G directors individually. Then, on April 24, 2013, P&G announced that its 3rd quarter earnings had risen 6%. However its 4th quarter forecast fell short of Wall Street's expectations. Shares fell 5% based on this outlook. P&G results were lagging its peers by 4% in 2012 and 2% in the first quarter of 2013.

Then, abruptly in late May, CEO Robert A. McDonald, who was 59, resigned. The board selected A.J. Lafley, (65) who had been McDonald's predecessor to return to lead the company. There was speculation about how long Lafley would stay and in what direction he would take the company. On June 6th, P&G announced that Lafley had appointed four senior executives to lead the company's major businesses, reporting directly to him.

Keywords

Ackman; P&G; Pershing Square Capital Managment; Disruption; Management Succession; Crisis Management; Acquisition; Consumer Products Industry; Financial Services Industry

Citation

Lorsch, Jay W., and Kathleen Durante. "Procter & Gamble." Harvard Business School Case 413-127, June 2013. (Revised September 2015.)
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About The Author

Jay W. Lorsch

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Related Work

    • June 2013 (Revised September 2015)
    • Faculty Research

    Procter & Gamble

    By: Jay W. Lorsch and Kathleen Durante
Related Work
  • Procter & Gamble By: Jay W. Lorsch and Kathleen Durante
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