The biggest proxy fight in history, pitting activist investorNelson Peltz against Procter & Gamble Co., will also be one ofthe most expensive.

The two sides expect to spend a combined $60 million on thecontest for a board seat at the Cincinnati-based company, accordingto separate regulatory filings this week by P&G and Peltz'sTrian Fund Management. Peltz estimated his firm will deploy $25million to gain access to the consumer-products company'sboardroom, while P&G said it budgeted an extra $35 million tokeep him out.

The driving force behind the high spending will be reaching themillions of individual investors who own P&G shares, said TomBall, a managing director at Morrow Sodali, a proxy-solicitationfirm. Peltz, 75, suffered his first-ever loss in an activistcampaign in 2015, when he tried to get on the board at DuPont Co.,another old-line company that is widely held by mom-and-popinvestors.

“The difference in that fight was the positive response by theindividual retail holders” to DuPont's proxy solicitation, Ballsaid in a telephone interview. “You have the same kind of situationhere.”

The median cost of a proxy fight last year for the targetcompany was about $1 million, according to FactSet Research SystemsInc. Apparel retailer Chico's FAS Inc. spent the most of anytarget, incurring costs estimated at $5.9 million to fend off acampaign by Barington Companies Investors, according toFactSet.

The costs of a contest typically include printing and mailingmaterials to stockholders as well as reimbursing banks and brokerswho forward the documents to their clients. Dissidents and targetcompanies also face fees for consultants, lawyers, financialadvisers and proxy-solicitation firms, as well as any advertisingto support their candidates. Even documents transmittedelectronically instead of mailed add to the costs.

The P&G proxy battle has been billed as the largest everbased on the company's market capitalization, which at $233 billionis among the biggest in the S&P 500 Index. But in such acontest the number of shareholders can be just as important,according to Ball. It's easier and less expensive to solicitproxies at businesses that are dominated by a few largeinstitutions, such as endowments, pension plans and moneymanagers.

P&G, known for household brands such as Tide and Pantene,had 2.9 million common shareholders as of June 2016, according toits annual report. Apple Inc., the largest member of the S&P500 with a market value of about $782 billion, had less than 26,000shareholders of record as of October.

“We have a very large and a very broad shareholder base,” saidDamon Jones, a P&G spokesman. “We will spend what we need tospend to ensure that our shareholders are well informed.”

Anne Tarbell, a spokeswoman for New York-based Trian, didn'timmediately return a call seeking comment.

'Well Spent'

P&G's expenditures will include $2.5 million for proxysolicitors D.F. King & Co. and Mackenzie Partners Inc.,according to documents filed Tuesday with the Securities andExchange Commission. The firms will devote about 450 employees tosoliciting shareholders on P&G's behalf.

That is more than double the 200 people who solicited proxiesfor DuPont when Peltz narrowly lost a bid for board representationat the chemical company. He estimated expenditures of $8 millionfor his DuPont campaign, while the target company projected layoutsof about $15 million beyond those customary for an annual meeting.In a Bloomberg Television interview afterward, he vowed to dobetter with retail investors next time.

Earlier this year, Paul Singer, the billionaire head of ElliottManagement Corp., projected that his winning push for board seatsat New York-based Arconic Inc. would run about $15 million,including the cost of mailing thousands of video players to retailinvestors with a four-minute pitch on his activist campaign.Arconic slated spending of $17.5 million.

“On balance, retail shareholders tend to support management morethan dissidents,” Ball said. “It's money well spent to get them toreturn a proxy.”

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