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Cevian buys ThyssenKrupp stake, fuels spin-off speculation

, September 27, 2013, 0 Comments

Activist investor Cevian has raised its stake in struggling ThyssenKrupp, claiming the German steelmaker is undervalued. However, it’s unclear if the Anglo-Swedish firm will not eventually seek to split up ThyssenKrupp.

Cevian has raised its stake in German steel conglomerate ThyssenKrupp to 5.2 percent, the Anglo-Swedish activist investor announced in a regulatory filing Wednesday.

In a separate statement, the private equity fund said it considered ThyssenKrupp as undervalued, and that it was encouraged by a recent strategic shift by management.

ThyssenKrupp’s share price has persistently fallen since June 2011 on the back of huge losses stemming from its misguided expansion in the United States and Brazil. Under a major restructuring program, the German conglomerate is cutting jobs, aims to sell its Steel America’s unit and seeks to transform from a steelmaker to a capital goods business.

Cevian calls itself an active investor which buys stakes in companies where it sees potential for improving operational performance, corporate strategy and structure.

ThyssenKrupp’s strategic realignment was beginning to show results, said Cevian’s chief for Germany Jens Tischendorf, adding: “We fully support the management’s strategy and see great potential for the development of the company.”

ThyssenKrupp Chief Executive Heinrich Hiesinger said in a statement Wednesday that Cevian was known for its comprehensive industrial experience and interested in the long-term development of its acquisitions rather than in short-term stock market profits.

On Wednesday, however, it was unclear whether Cevian would press for further changes at ThyssenKrupp, including the spinoff of profit making entities. All Cevian said was that it didn’t rule out raising its stake in the steelmaker further.

Source: Deutsche Welle |