Cevian Capital AB, Europe’s largest activist firm, says enhancing shareholder value through considering a change in where a stock is listed will be a big part of its investment and restructuring campaigns in the coming years.
Such arbitrage opportunities will be at the top of the firm’s agenda when evaluating investments going forward, according to Christer Gardell, managing partner and founder of Cevian. “We are looking at this everywhere, when it comes to our current portfolio but also when we consider new investments,” he said in an interview in Stockholm.
While management of CRH has done an “excellent job,” since Cevian started building its stake in 2019, the company is still trading at a discount to its US-listed peers, Gardell said. If valued in line with US-listed competitors Vulcan Materials Co. and Martin Marietta Materials Inc., he said shares would trade above €80 , implying an upside of around 60% from today’s level.
“This will become the theme in the corporate restructuring market in the coming two to three years,” Gardell said. “European companies are beginning to think more actively about how to deal with the valuation gap, as they get more exposed to takeovers by US companies that are valued roughly 30-40% higher.” It will also strengthen the companies’ buying power when participating in M&A activities, he said.
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