By Jessica Wohl and Svea Herbst-Bayliss
July 13 (Reuters) - Procter & Gamble Co was worth $10.11 billion more on Friday afternoon as investors counted on activist investor William Ackman to spur big changes at the world's biggest household products maker.
But as the initial euphoria over Ackman's investment passes, investors should count on having to wait awhile for the next move, if his track record is any indication.
Ackman has not yet said what he plans to do with his new investment in P&G, disclosed on Thursday, and he could not be reached for comment on Friday.
But the mere fact of his Pershing Capital buy-in may push the maker of Pampers diapers and Gillette razors and other household names to improve its profitability more quickly and work on its restructuring more aggressively.
Ackman's involvement could force P&G to cut costs even more than the $10 billion it outlined in February, and may spur the board to consider whether a management change is needed, analysts and investors said.
"We view it as a positive as it puts more pressure on the board and management to kind of make the changes a little quicker and steeper," Vic Lassandro, managing director of RiverPoint Capital Management, said of Ackman's buy-in.
Eliminating more costs through cutting jobs and overhead spending is "probably the biggest opportunity to make changes, aside from management," said Lassandro, whose firm has about $1.1 billion in assets including roughly 200,000 shares of P&G.
Shares of P&G rose 2.2 percent to $65.09 on Friday on the heels of a 3.7 percent rise on Thursday.
P&G declined to comment and has not said whether it has hired an adviser since it learned of Ackman's stake.
Goldman Sachs has been the firm of choice for several of Ackman's targets. J.C. Penney hired the firm in October 2010 to help defend against a fight with Ackman, who had started loading up on the retailer's stock that summer. Before that, Target Corp relied on Goldman to beat back Ackman's proxy challenge in 2009.
Ackman is known to place big bets, and often has no more than a dozen names in his portfolio. He has frequently unveiled big holdings in the early fall, announcing his stake in railroad operator Canadian Pacific Railway in October 2011 and announcing the J.C. Penney stake in October 2010.
With most firms, Ackman likes to begin the conversation on a polite note, often volunteering to fly out to the company's headquarters from his New York base to meet with management and present his plans for improvement, people familiar with his past campaigns have said.
Ackman can also be seen to be pushy and impatient, which has cooled relations with some companies. Relations with Target became strained but Ackman kept his holding in the discount retailer even after he lost an expensive and emotional proxy contest.
"One of their jobs is to become a mouthpiece for investors who are frustrated. I think you have a lot of investors who are frustrated," said Sanford Bernstein analyst Ali Dibadj. "The size of the investor frustration is proportional to the size of the company."
P&G is one of the biggest U.S. companies. Its $178 billion in market capitalization places it in the top 15 in the Standard & Poor's 500 index. Sales topped $82 billion last year.
While some continue to believe P&G is too big, a break-up along the lines of the one Ackman helped push at the former Fortune Brands or the pending split of Kraft Foods Inc is unlikely.
"I don't see them splitting the company up or anything like that," said Lassandro.
P&G asserts that its size and variety are benefits and has already sold off non-core units such as Folgers coffee and Pringles chips. Duracell and Braun remain on the radars of investors and analysts as other businesses P&G could still sell.
"Obviously, we think there's tremendous advantage to having the scale that we have," P&G Chief Executive Bob McDonald said during a January conference call, before the restructuring and other plans were announced.
Ackman prefers to conduct his initial discussions out of the limelight. Traditionally, he has come prepared with specific proposals for change at other companies.
At Penney, for example, he had long had his eye on recruiting Apple's Ron Johnson, making a first pass at him as a possible board member. Up until now, when Ackman has waged battles to remove a CEO, the replacements have generally been outsiders.
Bringing in an outsider to run P&G would be a tremendous change for a company that prides itself on grooming young executives and moving them up the corporate ladder over decades.
McDonald, P&G's CEO since 2009, went from being a captain in the U.S. Army to being a P&G brand assistant in June 1980 and has never left. His predecessor A.G. Lafley headed from Harvard Business School to P&G, where he spent more than 30 years.
There are several potential candidates who could be good fits for the board, if not new members of management, who have past experience with P&G, Dibadj said.
Those include former Gillette CEO Jim Kilts, who stayed with P&G briefly after it bought his company in 2005; Lafley; former P&G Chief Financial Officer Clayt Daley; Kerry Clark, the retired CEO of Cardinal Health who spent 32 years at P&G; and former P&G executives Rob Steele, Susan Arnold and Ed Shirley.