One of Vodafone Group’s biggest shareholders has hailed an activist campaign aimed at improving the telecom firm’s performance as “very sensible”.
The comment from Andrew Millington, head of UK equities at Abrdn, a top-10 shareholder in Vodafone, supports the call for restructuring by Europe’s largest activist investor Cevian Capital, which has built an undisclosed stake in Vodafone and has been engaging with the telecom company’s management for months, the Financial Times reported.
“We would like to see management execute on what it has said it’s going to do around the portfolio, such as in-market consolidation and potential strategic opportunities for its towers business,” said Millington.
Vodafone was the top performer on the FTSE 100 for most of the morning session today, before giving up some gains to finish up 1.88 per cent.
The British telecoms giant has nearly halved in value since 2018 and Cevian is now reportedly keen for the firm to begin aggressively consolidating mobile operators in weaker telecoms markets like Spain, Italy and the UK, sources cited by the Financial Times said.
Shareholders have lost 9.4 per cent in the past five years versus a gain of 24.4 per cent for the FTSE 100 over that time.
Cevian is also ramping up pressure on the firm’s board which it attacked for a lack of industry experience. It claimed the board did nothae the necessary experience to challenge executive decision-making
Cevian has built a reputation for driving through aggressive simplification strategies at sprawling multinational firms which it believes are being run inefficiently.
It is also currently agitating for changes at firms including Swedish telecoms group Ericsson and UK insurance firm Aviva.