Wall Street raider Nelson Peltz puts tanks on lawn of £13bn Ferguson

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Wall Street billionaire activist Nelson Peltz made a stunning return to the UK market on Thursday with a £736 million raid on historic British plumbing giant Ferguson. 

The tycoon, who has previously waged campaigns against Cadbury and Intercontinental Hotels, revealed a 6% stake in the business formerly known as Wolseley through his UK vehicle Trian Investors.

The FTSE 100 plumbing wholesaler, led by chief executive John Martin, makes around 90% of its sales from the US market, selling supplies to tradesmen and home DIY enthusiasts. 

Peltz is expected to ask Ferguson to scrap its UK stock-market listing and move to an American listing where shares could possibly be worth more. 

The company is valued more cheaply in the UK compared with American rivals Home Depot and Lowe’s.

The shares rose 6% today, climbing 522p to 5632p. 

Trian said: “Ferguson is an attractive business that trades at a discount to comparable US peers. Trian has contacted members of Ferguson’s management team and looks forward to working with them to explore and implement initiatives that it believes can create long-term shareholder value.”

A Ferguson spokesman said: “We welcome dialogue with Trian, as we do with all our shareholders.”

However, the request could put him on collision course with Ferguson’s non-US shareholders, who own 60% of the UK-listed shares. 

Relisting shares in the US could force the majority of Ferguson’s shareholders to sell if they are unable to hold US stocks. A similar situation occurred when Unilever tried to move its listing to Amsterdam last year.

Balancing shareholder demands will be left to chairman Geoff Drabble, the ex-FTSE 100 chief of Ashtead, who takes over after the annual meeting. Martin is the former chief financial officer and has a background in private equity.

Peltz has invested in Ferguson using £250 million from Trian. The vehicle is backed by City names likes Invesco, Janus Henderson, Fidelity and Pelham. Around £486 million of the investment comes from his US funds. 

The 76-year-old is expected to come to London soon and is preparing for a campaign lasting months, a source said. 

He is well known for his glamorous lifestyle, boasting 10 children and a string of Hollywood ex-girlfriends.

Trian was co-founded by Peltz, Peter May and Ed Garden.

Source Article from https://www.standard.co.uk/business/wall-street-raider-nelson-peltz-puts-tanks-on-lawn-of-13bn-ferguson-a4166521.html

June 13, 2019 |
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