• The New York Times, Friday, June 22, 2007 11:30 AM

Nelson Peltz, the activist investor who has quietly acquired a 3% stake in Kraft Foods, is planning to press Kraft to sell the Post cereal business and Maxwell House, in an effort to raise its long-stagnant stock price. Sources say he is expected to recommend that Kraft take on more debt and begin a huge stock buyback program.

Last year, Kraft brought in Irene B. Rosenfeld from PepsiCo to turn the company around, and she has embarked on an ambitious plan to create more innovative products and bolster marketing. While many analysts believe Rosenfeld's plan holds promise, they don't see much improvement any time soon.

Kraft has become the latest target for Peltz and his activist firm, Trian Fund Management. Peltz is reportedly planning to approach Kraft directly in the next week. While he is prepared to mount a proxy contest for board seats if his demands are not met, he is hoping to start a dialogue with the company--the way he did with Cadbury and Tiffany--without resorting to a bitter public fight.

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