By Aby Jose Koilparambil and Yadarisa Shabong
(Reuters) -Activist investor Elliott called on Friday for Britain’s Taylor Wimpey to replace its departing chief executive Pete Redfern with an external candidate, saying there had been “missteps” at the FTSE 100 company over the years.
Elliott has in recent months ramped up its campaign for changes in several London-listed companies, including energy firm SSE, drugmaker GlaxoSmithKline and pharmaceutical services group Clinigen.
In a letter to the Taylor Wimpey board, Elliott disclosed it was now among the top five shareholders in Britain’s third-largest homebuilder, although it did not disclose the exact stake it holds.
Taylor Wimpey said it would “respond in due course”.
The company said on Wednesday that Redfern would step down and leave once a suitable candidate had been found. Media reports have said Redfern’s exit after 14 years in the role came after Elliott built a stake.
“A series of operational and strategic missteps has resulted in persistent share-price underperformance, leaving (Taylor Wimpey) shareholders frustrated and lacking confidence in the company,” Elliott said in the letter.
Elliott said Taylor Wimpey’s 2018 strategy to focus on large sites led to cost overruns and sale-price erosion, while proceeds from an equity fundraising last year did not meet the intended purpose of “exceptional” land buying opportunity.
The activist investor added that Taylor Wimpey’s process to find a new CEO must be “transparent and thorough” and the company must focus on external candidates.
Shares of the London blue-chip company, which lost about 15% of their value in 2020, are up 2% this year compared with larger rival Barratt Development’s more than 10% rise.
In August, analysts at AJ Bell attributed the underperformance of Taylor Wimpey shares to valuation concerns and uncertainty concerning an ongoing dispute with Britain’s competition regulator over dropping unfair rent terms.
(Reporting by Yadarisa Shabong and Aby Jose Koilparambil in Bengaluru; Editing by Amy Caren Daniel and Alexander Smith)
