Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Pearson shares jump 11% as activist Cevian discloses stake

Published 12/06/2020, 10:00
Updated 12/06/2020, 10:05

STOCKHOLM (Reuters) - Shares in Pearson (L:PSON) jumped 11% on Friday after activist investor Cevian Capital disclosed a 5.4% stake in the British education publisher, lifting expectations for a performance boosting shake-up at the company.

Cevian Capital, which holds large stakes in companies such as Ericsson (ST:ERICb), ABB (S:ABBN) and CRH (L:CRH), said it had been following Pearson closely for several years.

"The company has a collection of leading businesses in attractive markets, but several of these businesses have yet to deliver on their full potential," Cevian Managing Partner and co-founder Christer Gardell told Reuters.

"Based on our analysis, we see no reason Pearson’s businesses shouldn’t outperform their competitors, and produce attractive, growing and predictable returns. This will require first-rate decision-making and robust execution".

Pearson shares are still down 11% so far this year.

JPMorgan (NYSE:JPM) analysts said in a research note its own sum of the parts valuation highlighted "the potential for disposals, releveraging and significant cash returns".

Cevian's Gardell said he expected Pearson to appoint a CEO with "a clear track record of shareholder-value creation" to replace current CEO John Fallon, who is due to retire later this year.

Cevian often targets companies with weak profitability and complex structures, providing opportunities to improve returns through measures such as cost-cutting, divestments, spin-offs and management change.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.