Activist Converium calls on UK vet group CVS to initiate stock buyback
Converium Capital Pressures CVS Group for Shareholder Action
May 13 (Reuters) - Activist hedge fund Converium Capital on Wednesday called on British veterinary group CVS to improve performance and initiate a 100 million pounds ($135 million) buyback, ramping up pressure after private talks failed to yield action.
Key Details of Converium's Demands
Here are some details:
Converium's Letter and Stake
• In a letter to CVS Group, Converium highlighted its undervaluation and said that no meaningful action is being taken despite engagement.
• The hedge fund holds about 2% stake in CVS, according to LSEG data.
Investor Sentiment and Board Pressure
• "Acting decisively would re-engage investors who have grown skeptical of the Board’s stewardship of shareholder capital," the Montreal-based fund said.
• Converium has warned that it could seek board representation if CVS Group fails to act on its demands, the Financial Times reported earlier on Wednesday.
Industry Context and Market Impact
• Converium's push comes months after Britain's Competition and Markets Authority (CMA) wrapped up a multi-year investigation into the vet industry, imposing reforms such as price transparency measures and caps on prescription fees.
Share Price Performance
• Up to the last close, CVS' shares were down 18.5% since the CMA's provisional decision following the veterinary services market investigation.
Company Response
• CVS did not immediately respond to Reuters' request for comment.
Additional Information
($1 = 0.7388 pounds)
(Reporting by Simone Lobo and Ankita Bora in Bengaluru; Editing by Harikrishnan Nair and Eileen Soreng)
