Smith & Nephew shares soar as activist Cevian builds stake

By Yadarisa Shabong

(Reuters) – Shares in Smith & Nephew rose 6% on Thursday after activist investor Cevian Capital disclosed a 5% stake in the British medical equipment maker, a filing showed.

Smith & Nephew, which makes orthopaedic implants and prosthetics, wound dressings and other surgical materials, has lost more than 50% of its stock value from an all-time high hit in February 2020, just before the pandemic lockdowns.

“Smith & Nephew owns fundamentally attractive businesses in structurally growing markets, but the company has not generated shareholder value for many years,” Friederike Helfer, a partner at Cevian Capital said in a statement.

Its FTSE 100 shares have struggled to eke out yearly gains for the past four years.

“Cevian sees the potential to create significant long-term value by improving the operating performance of the company’s businesses. We have high expectations for the board and management to realize this potential,” he added.

Cevian, which has offices in Stockholm, London and near Zurich, took a stake in Swiss insurer Baloise in May.

Cevian is No.3 shareholder in Irish building materials firm CRH, which last year ditched its primary London listing in favour of New York.

It is currently the top shareholder with a nearly 13% stake in global education group Pearson, which had reportedly faced investor pressure last year to move its listing to New York.

Last year, Cevian sold down its entire stake in British insurer Aviva and ended its campaign to drive up investor payouts at the FSTE 100 company.

Smith & Nephew shares were last up 6.3% to 1,048 pence by 0814 GMT, the top gainer on the FTSE 100 .

(Reporting by Yadarisa Shabong in Bengaluru; Editing by Janane Venkatraman and Nivedita Bhattacharjee)

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