Activist investor Cevian dumps its entire stake in Vodafone

Europe’s largest activist investor has dumped its entire stake in Vodafone in apparent defeat.

Cevian Capital had accumulated a large but undisclosed stake in the FTSE 100 telecom giant by 2021, becoming one of the top ten shareholders.

The group urged the company to downsize its operations and sell underperforming divisions in a bid to reverse a poor performance in its stock price, which has fallen 60 percent over the past five years .

But Cevian appears to have given up efforts to reform the company now that the hedge fund has redeemed its entire stake, according to people familiar with the matter.

The move followed news in October that the activist had scaled back his stake over the summer as rising interest rates dampened prospects that Vodafone could strike favorable deals.

An agreement signed in August for Vodafone to sell its Hungarian operations for £1.6bn did not appear to have helped matters.

It could also mean that Cevian has little confidence in the successor to ex-boss Nick Read, who was put at the helm last month after just over four years.

His departure has sparked furious speculation about the company’s future direction, as well as the fate of a planned merger with rival mobile network Three, which, if completed, would become Britain’s largest mobile supplier with more than 27 million customers .

Vodafone is currently led by Chief Financial Officer Margherita Della Valle, who acts as acting CEO.

The news of Cevian’s departure came after James Rasteh, the head of fellow activist investor Coast Capital, said it had also sold its position in Vodafone after concluding there was no compelling model for the company.

But while activists are leaving Vodafone, other major investors are throwing their weight behind the company.

Earlier this week, the group’s largest shareholder, Emirati telecom group e&, formerly known as Etisalat, increased its stake from 11 percent to 12 percent, bringing the value of its stake to nearly £3 billion.

E& is considered an ally of Vodafone’s management, as its boss Hatem Dowidar was previously head of the telecom group’s Egypt arm and chief of staff of its London office.

Karen Egan of research group Enders Analysis said that e&’s public support for Read’s approach before his departure “probably prompted Cevian to withdraw.”

But she added that while the activist investors “may have given up hope,” other investors would “campaign hard for a new approach” to make up for losses in the share price.

The board will come under intense pressure from all shareholders, many of whom have lost a quarter of their money in Vodafone shares in the past year alone, to appoint a new boss with a more radical vision ‘ said Egan.

One of the potential troublemakers is French billionaire Xavier Niel, the founder of telecom company Iliad, who owns a 2.5 percent stake and has said Vodafone’s new head needs “a clear roadmap” and is ready to help in formulating a strategy. .