Activist hedge fund manager Elliott has bought a 5% stake in insurance and travel firm Saga Group.
Elliott is known for its aggressive tactics to influence boardroom strategies and its investment in Saga comes amid a challenging time for the company.
Saga, which specialises in services for the over 50s, in April cut its dividend after swinging to a 2019 loss and warning that it expects weaker margins to hit the current financial year’s results.
Margins will be squeezed by the overhaul of the insurance arm, which will include spending more on marketing and reducing prices to lure in more insurance customers.
Saga’s shares, which have more than halved since the start of the year, received a much needed boost on Wednesday’s news of the Elliott stake.
A Saga spokesperson said: “We have good and open relations with all of our shareholders and expect to be in contact with Elliott shortly.”
Saga is searching for a new chief executive after Lance Batchelor said last month that he would leave in January 2020. Batchelor has led the company since it floated in 2014.