Another US activist investor is taking a pop at a British company.
Engine Capital, a New York-based hedge fund set up in 2013, is calling for FTSE 100 engineer Smiths Group, founded in 1851, to explore a break-up or sell itself in entirety.
Arnaud Ajdler, Engine’s founder and portfolio manager, who teaches ‘value investing’ at Columbia Business School, told Smiths bosses the company is significantly undervalued ‘due to its conglomerate structure’ and that needs to change.
Engine owns about 2 per cent of the £6billion company, which employs more than 15,000 people and is known for making airport security scanners.
Smiths (up 5.5 per cent, or 97p, to 1862p) insisted it has ‘a clear focus on creating shareholder value’, evidenced by two recent upgrades to guidance. Meanwhile, the US hedge fund Saba Capital, run by Wall Street financier Boaz Weinstein, continues to target seven UK investment trusts with plans to replace their directors with allies.
Smiths contributed to the latest 113.32-point rise by the FTSE 100, up 1.4 per cent this week to a record 8505.22 ahead of the long weekend in the US.
The FTSE 250, more exposed to the struggling UK economy, advanced a further 0.3 per cent, or 69.72 points, to 20597.42 in anticipation of the first in a string of interest rate cuts by the Bank of England next month.
The prospect of cheaper borrowing pepping companies and consumers lifted more domestically focused sectors such as housebuilders, banks and retailers.
Persimmon gained 1.8 per cent, or 21.5p, to 1201p and Associated British Foods, owner of High Street discount fashion chain Primark, improved 2.2 per cent, or 44p, to 2012p ahead of a quarterly trading update next Thursday.
At the end of a busy week for company results, DFS Furniture rose 5.1 per cent, or 7p, to 145p after estimating profit had nearly doubled in the first half its year to as much as £17m.
But the sofa retailer cautioned that profits were likely to fall in the rest of the year as Budget measures drive up costs.
The owner of William Hill gave shareholders in gambling firms fresh reason to cheer as it declared profits have come in ‘well above’ City forecasts.
Evoke, which also owns online casino groups 888 and Mr Green, advanced 5.5 per cent, or 3.8p, to 72.5p after revenues in the final quarter of 2024 were as much as 13 per cent higher than in the same period a year earlier.
Boss Per Widerstrom noted some ‘friendly’ sports results for the bookie as both Manchester City and Arsenal – often heavily backed by punters to win – hit a run of poor form.
The company said profits look to have hit ‘the high end’ of its previous forecast of £300m to £310m – well ahead of the £294m pencilled in by analysts.
Spirent Communications was steady at 176.4p. Confirmation of a strong close to its year came a day after the competition watchdog said it would look into the planned £1.2billion takeover of the telecoms tester by America’s Keysight Technologies.
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