Friday 6 November 2015

Introducing Europe's "best" activist investor

Fortune magazine recently declared it Europe's "best" activist investor. That's Cevian Capital, the investment firm in which Lord Myners, the former Labour City minister, is a partner. Here is a link the Fortune magazine article:

However, it would appear the firm, which manages about EURO 10 billion, has run into a bit of trouble with its investment in chemicals company Alent (formerly known as Cookson).

Cevian Capital built a 22pc stake in Alent a few years ago and when US-based Platform Speciality made a 503p cash offer for the company in July, the activist struck its own side deal that saw it get a share alternative worth around 511p a share (at the time of when the offer was announced). Cevian Capital also gave an irrevocable undertaking to opt for the share alternative whilst the rest of Alent shareholders were stuck with cash at effectively a lower price.

But now Cevian Capital's move is not looking so smart as Platform Speciality has seen shares battered in the last three months, tumbling almost 50pc to $11 at yesterday's close. Indeed, at the time of the deal announcement Platform Speciality's shares were trading at $17.20

So, that effectively means Cevian Capital is now getting around 375p a share in Platform Speciality paper for its 22pc stake in Alent whilst the rest of Alent shareholders are getting 503p in cash.

When I asked Cevian Capital about the situation, a spokesperson said the firm "declines to comment". I suspect that's because the fund is either too embarrassed about the situation or potentially cooking up a way of extracting itself from the side deal...

1 comment:

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