Swedish activist investor Cevian seeking turnaround at Vodafone

Swedish activist investor Cevian seeking turnaround at Vodafone

by Pranali Mehta

Cevian, an active ownership investment firm based in Sweden, has reportedly targeted the British telecommunications giant, Vodafone, raising speculations that the company may be pressured to restructure its floundering global operations.

According to sources, the Swedish investment company has expanded its stakes in Vodafone recently, pressurizing the company to enhance its performance.

Shares in the British corporation have decreased dramatically in value since 2018, with investor confidence seemingly decreasing as a result of a series of sell-offs and acquisitions, leading to speculation that Vodafone overpaid for holdings such as the German cable firm it purchased in an €18 billion deal that same year.

Cevian, which considers itself a constructive investor in misunderstood, overlooked, or out-of-favor companies, has gained prominence within the City after acquiring a 5% stake in Aviva Insurance. It also holds a major stake in Pearson, an education publisher, and Ericsson, a telecommunications company based in Sweden.

Nick Read, who has been CEO since late 2018, will face more pressure to reorganize the company. Read accepted compensation cutbacks soon after his arrival to turn off an investor rebellion in 2019, after Vodafone announced it would be unable to pay dividends due to massive losses in buying the 5G spectrum in the auctions across Europe.

Analysts anticipate that Cevian may press Vodafone, a £34 billion company based in Berkshire, to strengthen its UK presence by buying other telecommunications companies to compete with Virgin Media and BT, or selling down its remaining shares in the mobile masts sector it set off in 2019.

However, Vodafone and Cevian did not confirm the matter.

Meanwhile, BT is also under pressure from an activist investor, Altice, the French telecommunications company owned by the billionaire Patrick Drahi, which began building up an 18% stake in the company last month. Despite signals that he may be moving towards a buyout, Drahi claimed he supported BT's plan, albeit the UK government might reject any such move.

Source credit: https://www.theguardian.com/business/2022/jan/30/swedish-activist-investor-targets-vodafone-over-weak-performance

Pranali Mehta

A chemical engineer by qualification, Pranali Mehta dutifully walked down the slated path and worked in a chemical firm for a year. Her passion for writing however, pushed her into experimenting with the same as a career. With over three years of experience in content writ Read more...