Cevian, Europe’s largest activist investor, holds a 5% stake in Aviva, putting pressure on FTSE 100 insurers to further reduce costs and return £ 5 billion to shareholders. I will.
“Aviva has been under-managed for many years, and its high-quality core business has been hampered by high costs and a series of inappropriate strategic decisions,” said Christel, co-founder of Sebian.・ Gardel states.
Aviva’s share price rose 3.3% to £ 4.24 after Cevian issued a statement on Tuesday morning.
Rather than encouraging a change in the leadership of the top of the London-listed group, CEO asks CEO Amanda Blanc to build on a series of dispositions announced since the takeover. Almost a year ago..
Aviva has agreed in the last year sell Eight non-core businesses have raised approximately £ 8 billion in an attempt to refocus on the UK, Irish and Canadian markets. The global ambitions pursued by its predecessor CEO have been criticized by some analysts for being unfocused and for the group’s cost base being too large.
“It has the potential to generate profitable growth, generate large amounts of cash, and become a highly valued, concentrated and well-capitalized market leader in the stock market,” Girdle said. Stated.
Sebian, which manages more than $ 16 billion for about 350 pension funds, endowments and other global investors, began building Aviva shares earlier this year, according to people familiar with the matter. With a 4.95% stake, this Swedish group is currently Aviva’s second largest shareholder after BlackRock.
Aviva promises significant returns and cost savings as its core board. Strategic shift Under Mr. Bran, she tells investors that her mantra is to act swiftly.
However, Sebian wants a specific £ 5bn return on dividends or equity repurchases held by insurers beyond regulatory requirements. The activist fund also believes that cost savings will go further, calling for a reduction in Aviva’s annual cost base of more than £ 500m by 2023, compared to management’s goal of £ 300m. According to people familiar with the matter, the company is also promoting a slimmer management structure.
There has been constructive debate between Cevian and Aviva management in recent months, adding that the fund is not seeking a board position, according to people familiar with the matter.
Aviva’s share price should rise to more than £ 8 within three years, with Sevian estimates that the annual dividend will more than double to 45p. Insurers could also benefit if interest rates start to rise, activist investors said.
According to S & P Capital IQ data, Aviva’s share price is trading at 7x futures profit, more than 9x lower than its UK competitors such as Legal & General, Phoenix Group and Direct Line.
Aviva said it has made “significant strategic advances in the last 11 months” and remains “thoroughly focused” on improving performance.
“We welcome the idea of engaging with investors on a regular basis and moving us towards our goal of providing long-term shareholder value,” he added.
Aviva is not the first UK insurer targeted by Cevian. The fund has run a multi-year campaign against rival RSA. Its sale Last week at Intact in Canada and Trig in Denmark.
Sevian, who calls himself a “constructive activist,” usually holds shares for about five years and holds shares in 10 to 15 companies.
Cevian will build a stake in Aviva to cut costs and seek £ 5 billion in payments.
Source link Cevian will build a stake in Aviva to cut costs and seek £ 5 billion in payments.