Activist investors descend on ‘bargain basement’ UK companies

Activist investors descend on ‘bargain basement’ UK companies

When Vodafone boss Nick Read unveiled a plan to energise the struggling mobile group in November, investors welcomed it as a step in the right direction after a lacklustre few years.

Little did they know that behind the scenes Vodafone was coming under pressure to improve its performance with the arrival of Cevian Capital in its shareholder base.

Since buying a stake in Vodafone months earlier, Cevian, Europe’s largest activist investor with roughly $15bn in assets under management, had been quietly engaging with management and the board. It urged them to be more aggressive in restructuring its portfolio and add more telecoms expertise to its board.

Whether Read telling investors of a renewed commitment to consolidation in Europe and willingness to offload businesses was a coincidence or shaped by the presence of Cevian, it is clear that activists are increasingly driving the conversation in the UK’s top boardrooms. Theseinvestors — who buy shares in a public company with the aim of effecting a significant change — are now on the shareholder register of at least nine companies in the FTSE 100. They are seeking to tap into shareholder discontent at companies such as Unilever and Vodafone following a period of underperformance, and are