Johnson Matthey PLC on Wednesday issued a response to Standard Investments, addressing concerns raised in a public letter dated January 7.
In Tuesday’s letter, the American investment firm escalated pressure on Johnson Matthey to address shareholder dissatisfaction, calling its response to a demanded strategic review ‘wholly insufficient.’
Standard Investments, a New York-based investment platform, is the largest investor in Johnson Matthey with an 11% stake.
Its letter criticised the London-based speciality chemicals firm for what it described as the significant destruction of shareholder value. The investor also expressed frustration with the company’s proposed governance changes, arguing they lacked the urgency and depth needed to address its concerns.
Johnson Matthey acknowledged the critique, emphasising that it had maintained an ongoing dialogue with Standard Investments since the firm became a shareholder in 2022.
In a release dated December 24, Johnson Matthey outlined its strategic and governance measures, including the formation of a new investment committee to be chaired by Senior Independent Director Barbara Jeremiah. The committee is tasked with capital allocation, investment decisions, and periodic assessments of strategic alternatives to enhance shareholder value. The company invited Standard Investments to meet with Jeremiah to discuss these matters further.
Despite these measures Standard Investments deemed the company’s actions inadequate, accusing the board of lacking urgency in addressing critical issues. In its letter, the firm indicated plans to engage with other shareholders and explore additional steps to push for change.
Johnson Matthey on Wednesday defended its efforts, highlighting progress in a comprehensive transformation strategy. The company pointed to initiatives such as the consolidation of its Clean Air segment, modernisation of its platinum group metals refining capabilities, ‘significant’ cost reductions, and the adoption of a global business services model. It also cited recent making ‘substantial commercial progress, winning new business across all our business areas that will drive future growth’.
The board reiterated its commitment to improving share price performance, driving cash flow, and delivering shareholder value, while adapting its strategy to ‘evolving’ market conditions. It assured shareholders that further updates would be provided as appropriate.
Shares in Johnson Matthey were up 0.4% at 1,354.00 pence each in London on Wednesday morning.
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