Smith & Nephew shares surged after activist investor Cevian Capital acquired a 5% stake

From Morningstar: 2024-07-04 07:57:00

Shares of medical equipment firm Smith & Nephew soared after activist investor Cevian Capital acquired a 5% stake. The stock jumped 7.2% today and 7.6% in the past five days, but has seen a 38.5% decline in the last five years. Cevian aims to push for more ambitious targets and a portfolio rationalization at the struggling company.

Smith & Nephew struggled during the pandemic, with elective procedures being cancelled impacting demand for its orthopaedic products. Cevian’s involvement is expected to challenge the company to set higher goals and streamline its operations. Smith & Nephew is open to dialogue with its shareholders, including Cevian.

Activist investors like Cevian buy stakes in companies to bring about strategic changes. Nelson Peltz, a prominent activist investor, recently engaged with London-listed Rentokil to enhance shareholder value. Peltz’s involvement often leads to a shift in business strategy or management, in pursuit of maximizing shareholder returns.



Read more at Morningstar: Smith & Nephew Shares Jump on Activist Investor Grab