Smith & Nephew shares soar as activist Cevian builds stake
Cevian's 5% stake to make it no.2 shareholder in S+N
S+N shares rise to top of FTSE 100
Cevian sees potential by improving operating performance
S+N says will continue talks with Cevian
Adds analyst quote in paragraphs 10-11
By Yadarisa Shabong
July 4 (Reuters) -Shares in Smith & Nephew SN.L rose 7% to the top of the FTSE 100 index on Thursday after activist investor Cevian Capital disclosed a 5% stake in the British medical equipment maker, a filing showed.
Cevian, whose newly disclosed holding would make it Smith & Nephew's second largest shareholder according to LSEG data, is known for taking stakes in companies and calling for change.
Smith & Nephew, which makes orthopaedic implants, wound dressings and other surgical materials, has lost more than 50% of its stock value from an all-time high hit in February 2020.
Pandemic lockdowns that led to surgery delays and supply-related disruptions from COVID times, as well as high raw material costs due to the Russia-Ukraine conflict, have taken a toll on the company, which has struggled to grow its margins.
"Smith & Nephew owns fundamentally attractive businesses in structurally growing markets, but the company has not generated shareholder value for many years," Friederike Helfer, a partner at Cevian Capital, said in a statement.
"Cevian sees the potential to create significant long-term value by improving the operating performance of the company’s businesses. We have high expectations for the board and management to realize this potential," he added.
Smith & Nephew's FTSE 100 shares have struggled to eke out yearly gains for the past four years.
The group said it would continue to engage with Cevian "as we dowith all of ourshareholders", without providing further details as the conversations are private.
In 2022, it started a transformation plan that aimed to grow its hip and knee implant, wound management and sports medicines businesses while expanding margins.
"Cevian is likely to hold management's feet to the fire and may look for more ambitious targets than set out under the existing improvement plan," AJ Bell analyst Russ Mould said.
"It could also push for a rationalisation of the company’s portfolio."
Cevian is No.3 shareholder in Irish building materials firm CRH CRH.N, which last year ditched its primary London listing in favour of New York.
It is also the top shareholder in global education group Pearson PSON.L, which had reportedly faced investor pressure last year to move its listing.
Cevian sold down its entire stake in British insurer Aviva AV.L last year and ended its campaign to drive up investor payouts at the FSTE 100 company.
Smith & Nephew shares were up 7% to 1,057 pence by 1016 GMT.
Reporting by Yadarisa Shabong in Bengaluru; Editing by Janane Venkatraman, Nivedita Bhattacharjee and Jan Harvey
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Penafian: Entiti XM Group menyediakan perkhidmatan pelaksanaan sahaja dan akses ke Kemudahan Dagangan Atas Talian, yang membolehkan sesorang melihat dan/atau menggunakan kandungan yang ada di dalam atau melalui laman web, tidak bertujuan untuk mengubah atau memperluas, juga tidak mengubah atau mengembangkannya. Akses dan penggunaan tersebut tertakluk kepada: (i) Terma dan Syarat; (ii) Amaran Risiko; dan Penafian Penuh. Oleh itu, kandungan sedemikian disediakan tidak lebih dari sekadar maklumat umum. Terutamanya, perlu diketahui bahawa kandungan Kemudahan Dagangan Atas Talian bukan permintaan, atau tawaran untuk melakukan transaksi dalam pasaran kewangan. Berdagang dalam mana-mana pasaran kewangan melibatkan tahap risiko yang besar terhadap modal anda.
Semua bahan yang diterbitkan di Kemudahan Dagangan Atas Talian kami bertujuan hanya untuk tujuan pendidikan/maklumat dan tidak mengandungi – dan tidak boleh dianggap mengandungi nasihat kewangan, cukai pelaburan atau dagangan dan cadangan, atau rekod harga dagangan kami, atau tawaran, atau permintaan untuk suatu transaksi dalam sebarang instrumen kewangan atau promosi kewangan yang tidak diminta kepada anda.
Sebarang kandungan pihak ketiga serta kandungan yang disediakan oleh XM, seperti pendapat, berita, penyelidikan, analisis, harga, maklumat lain atau pautan ke laman web pihak ketiga yang terdapat dalam laman web ini disediakan berdasarkan "seadanya" sebagai ulasan pasaran umum dan bukanlah nasihat pelaburan. Sesuai dengan apa-apa kandungan yang ditafsir sebagai penyelidikan pelaburan, anda mestilah ambil perhatian dan menerima bahawa kandungan tersebut tidak bertujuan dan tidak sediakan berdasarkan keperluan undang-undang yang direka untuk mempromosikan penyelidikan pelaburan bebas dan oleh itu, ia dianggap sebagai komunikasi pemasaran di bawah peraturan dan undang-undang yang berkaitan. SIla pastikan bahawa anda telah membaca dan memahami Notifikasi mengenai Penyelidikan Pelaburan Bukan Bebas dan Amaran Risiko mengenai maklumat di atas yang boleh diakses di sini.
