The stock in the British medical technology company Smith & Nephew is rising sharply since the activist fund Cevian Capital, with financier Christer Gardell, is investing nearly six billion on a large stake.
"Cevian sees great potential," writes Gardell in a comment.
It is not known exactly what Cevian has paid for the approximately 5 percent of the shares in Smith & Nephew that the activist fund has bought. But it involves 43.9 million shares in the British manufacturer of medical equipment, which on the stock exchange costs around 5.8 billion kronor.
"Smith & Nephew has attractive businesses in markets with structural growth but has failed to create shareholder value over many years. Cevian sees great potential for long-term value creation by primarily improving the company's operational results. We have high expectations that the board and management will successfully realize this potential," writes Christer Gardell when he motivates the deal in an email to TT.
Worse conditions in China
Smith & Nephew's stock – which according to the Financial Times has had headwinds for a while due to deteriorating business conditions in China – rises with almost 7 percent on the London Stock Exchange after the deal became known. The decline for the stock so far this year has after this price increase shrunk to 2.5 percent.
Cevian Capital – one of the major owners on the Stockholm Stock Exchange – has also recently bought into the Swiss major bank UBS.
The portfolio – totaling around 150 billion kronor – includes, in addition to Smith & Nephew and UBS, also shares in ABB, Autoliv, Baloise, Bilfinger, CRH, Ericsson, Metso, Nordea, Rexel, SKF, and Vesuvius, according to Cevian.
"A certain thawing"
The value of the portfolio has so far this year developed in line with the stock index, according to Gardell.
He expects that the 2024 stock market development will be affected by a "fairly weak economy" and that listed companies will have to work hard to improve their productivity instead.
"The risk for 2024 is on the downside; that the economy becomes weaker than expected," writes Gardell.
"Lower interest rates in primarily Europe will improve the stock market mood and strengthen expectations for 2025," he adds.
On the acquisition market, he sees "a certain thawing" ahead.
"But no drama."
