- Largest investor calls for strategic review
- Board focused on shareholder value
- Shares down 18% over the past year
Shares in Johnson Matthey (JMAT) were trading slightly lower at £13.41 after the specialty chemicals company hit back at criticism from its largest shareholder, Standard Investments.
The board and management team at Johnson Matthey said they remained ‘resolute in their focus on improving Johnson Matthey’s share price performance and delivering value for shareholders.’
The specialty chemicals company added that it was also fully committed to driving ‘enhanced performance, higher cash flow and stronger capital discipline.’
Johnson Matthey was responding to the second letter from Standard, which is now seeking support from fellow shareholders for its plans to shake up the board and launch a strategic review.
Standard first called for a strategic review, which could include the sale of part of all of the specialty chemicals company, in December.
New York-based Standard became a shareholder in the FTSE 250 firm in 2022 and has 11% stake in the company.
EXPERT VIEW
Russ Mould, investment director at AJ Bell said: ‘Having published its second open letter within a month to Johnson Matthey, Standard Investments yesterday warned it was going to seek support from other shareholders to drive change in the chemicals business.
‘Johnson Matthey has now made its most recent private letter to the activist public, but it doesn’t add much apart from reiterating progress in reviving the company, and that it is happy to meet the activist in person to discuss governance matters.
Standard Investments may only have an 11% effective stake in Johnson Matthey, but it is noisy, observed Mould, adding Johnson Matthey’s board needs to either make a more convincing argument for the activist to back down or bow to its demands and enforce change.
‘Judging by the ongoing share price weakness, the market appears to have little faith in the current strategy so might welcome the activist rallying the troops and getting the big shareholders on its side.’
DISCLAIMER: Financial services company AJ Bell referenced in this article owns Shares magazine. The author of this article (Sabuhi Gard) and the editor (Ian Conway) own shares in AJ Bell.
