The Faber Report

Procter & Gamble challenges activist Peltz on proxy vote recount, sources say

Key Points
  • Nelson Peltz won a board seat by a narrow 43,000 vote margin, independent inspector IVS Associates said last week.
  • The two sides have spent $60 million on the proxy fight.
P&G to challenge official proxy vote count electing Peltz: Source

Procter & Gamble has notified an independent inspector that it will challenge the proxy vote recount that narrowly gave activist investor Nelson Peltz a victory and a board seat last week, sources told CNBC.

Preliminary results tallied by the inspector, IVS Associates, showed Peltz won with about 43,000 shares, or 0.0016 percent.

Peltz's Trian Partners bought a stake in P&G earlier this year and pushed for a board seat, taking it to shareholders in a hotly contested election. P&G initially claimed victory.

The two sides have spent $60 million battling each other. They are now in the "snake pit," as CNBC reported earlier, a process where advisors for each side meet and review each contested vote to ensure it is valid. The review of the official vote tally will take many weeks and the challenge will come at the end for proxies deemed in question.

Trian said in a statement on Wednesday: "Regardless of how they voted, P&G shareholders should be concerned that P&G has opted to waste further time and shareholder money contesting the official tabulation of the independent Inspector. The review and challenge process will be a continued distraction at a time when management and the Board should be focused on improving business results and regaining lost market share."

Shares of P&G were down 0.7 percent midday Wednesday.

P&G says it hasn't formally challenged the vote.

In a statement, P&G said: "As we said before, the IVS tabulation results are preliminary and are going through the customary review to ensure a final and accurate count. P&G will disclose the results after receiving the Independent Inspector of Elections' final certified report, which we are pushing to get as quickly as possible."

WATCH:  Bill George on P&G challenge: Bring Nelson on the board

Bill George on P&G challenge: Bring Nelson on the board