Activist investor Elliott Investment Management has built a more than 10% stake in Norwegian Cruise Line Holdings Ltd (NYSE:NCLH) and plans to push for changes aimed at improving the cruise operator’s performance, according to a Wall Street Journal report.
Elliott, now among Norwegian’s largest shareholders, outlined its intentions in a letter and presentation to the company on Tuesday.
The firm said it is seeking board and management changes as part of an effort to turn around the Miami-based cruise company.
“While our preference is to reach a constructive resolution, we are prepared to take our case directly to shareholders at the company’s upcoming annual meeting,” Elliott said in its letter.
Elliott criticized the company’s current board, saying it had failed to meet its fundamental responsibilities and pointing to management decisions over the past decade, including the recent appointment of former Subway CEO John Chidsey as Norwegian’s chief executive.
The activist investor is seeking the addition of new independent directors with relevant industry and operational experience. Elliott has privately approached former Royal Caribbean president and chief operating officer Adam Goldstein about a potential board role, the Wall Street Journal reported.
Norwegian has faced cost pressures, increased competition and weaker demand compared with rivals Royal Caribbean and Carnival, which have posted consecutive gains.
In a statement, a Norwegian Cruise Line Holdings spokesperson said the company is “committed to delivering durable, long-term value creation, which will be led by our recently appointed CEO, John Chidsey.”
Elliott is also calling for the company to adopt a new business plan, according to materials sent to Norwegian.
Norwegian is the world’s fourth-largest cruise operator by passenger volume and has an approximate market value of $10 billion. Its brands include Oceania Cruises and Regent Seven Seas Cruises.
Shares of the cruise lined added almost 10% following the Wall Street Journal’s report.