Feb 2, 2022
Activist investors descend on ‘bargain basement’ UK companies
These investors - who buy shares in a public company with the aim of effecting a significant change - are now on the shareholder register of at least nine companies in the FTSE 100. Public companies in the UK have lingered at depressed valuations since Brexit and look cheap compared with other developed markets, providing an attractive entry point for investors. "A common theme is that many of these cheap opportunities are large, long-term underperforming companies who have faced strategic crossroads," said Sue Noffke, head of UK equities at Schroders. Unlike countries such as France and Italy, UK companies "Generally don't have large state or family holdings," with privileges that can come at the expense of minority shareholders, said Andrew Millington, head of UK equities at Abrdn, which manages £532bn. A December report by professional services company Alvarez & Marsal identified 148 European companies as potential targets for activist investors in the next 12 months.
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