Shire Plc (LON:SHP) advanced on Monday morning after weekend reports that an activist US hedge fund is demanding a string of divestments at the multi-billion pound biotech.
Sachem Head Capital Management – headed up by Scott Ferguson, the protégé of renowned activist investor Bill Ackman – has urged the FTSE 100 group to explore a sale or spin-off of several of its assets, according to a report on Saturday by Sky News.
It is the latest example of British boardrooms coming under pressure from some of their big investors, with French Connection Group (LON:FCCN) and Rolls Royce Holdings PLC (LON:RR.) also being targeted in recent months.
Sachem is understood to have acquired a stake in Shire this summer, with the demands being made in meetings between the hedge fund and the pharma group’s bosses since then.
According to someone close to the situation, Sky said the calls have not yet resulted in a formal letter to board members.
Shire spent US$32bn last January on the acquisition of Baxalta – a spin-off from its New York-listed rival, Baxter International – but investors have grown frustrated as the deal has so far failed to spark the share price into action.
In fact, Shire shares have lost almost a quarter of their value over the past 12 months.
The Dublin-based firm’s boss, Flemming Ornskov, has previously hinted that he was considering spinning off Shire’s neuroscience division, which makes ADHD treatments.
He said a decision on that would be made by the end of the year, also Sky reported that Sachem Head and other investors wanted to see change faster, although the fund did acknowledge the complexity of any break-up.
Both Shire and Sachem declined to comment on the story.
Shares rose by2.5% to £39.42 late on Monday morning.