Smith & Nephew shares jump after activist investor Cevian takes stake
The FTSE 100 firm's stock price rose as much as seven per cent in early trading, with Cevian taking a shareholding of just over five per cent.
Shares in medical equipment manufacturer Smith & Nephew jumped on Thursday after it disclosed Cevian Capital, Europe’s largest activist investor, had taken a stake.
The FTSE 100 firm’s stock price rose as much as seven per cent in early trading, with Cevian taking a shareholding of just over five per cent. The Stockholm-based investor now holds 43.9m shares in the company.
It marks Cevian’s first investment in Smith & Nephew, which said in a statement that it had “an open dialogue with our shareholders and will continue to engage with Cevian, as we do with all of our shareholders”.
“Cevian sees the potential to create significant long-term value by improving the operating performance of the company’s businesses,” Friederike Helfer, a partner at the investor, said on Thursday.
According to Cevian’s website, it typically takes positions in companies that it considers are “overlooked, misunderstood or out-of-favour with investors”.
Helfer added that Smith & Nephew had not generated shareholder value for many years. Its share price has underperformed so far this year and lags behind its main rivals, dropping almost eight per cent in 2024 prior to Thursday’s disclosure.
The stock had also fallen 18 per cent over the last 12 months and 43 per cent over the last five years. It hit a nine-year low last October.
The business, which makes hip and knee replacements, has been hit by tighter restrictions on procurement practices in China in recent times.
Cevian has previously taken positions in UK firms like Vodafone, Aviva, Pearson and RSA Insurance.
The investor, which also has offices in London and near Zurich, took a stake in Swiss insurer Baloise in May and previously invested in Swiss engineering group ABB and banking giant UBS.
