John Menzies Plc’s biggest shareholder is backing an activist investor’s campaign to get the struggling logistics company to consider splitting in two.
Kabouter Management LLC, a Chicago-based asset manager that owns 9 percent of Menzies, said the company operates in two “unrelated sectors” -- print media distribution and aviation support services. It said the structure “contributes significantly to the undervaluation” of Menzies’ stock.
The statement from Kabouter follows Thursday’s disclosure by Lakestreet Capital, a Swiss-based activist fund, that it was engaged in talks with Menzies’ senior management about “unlocking its intrinsic value,” possibly through a breakup.
Menzies’ shares had fallen by more than 40 percent in a year before Lakestreet’s announcement. The stock rose 2.6 percent to 400 pence at 3:58 p.m. in London, giving the company a market value of about 245 million pounds ($372 million).
Lakestreet estimates that by splitting in two, Edinburgh, Scotland-based Menzies would have an implied market value of about 415 million pounds.
Kabouter said it welcomed steps taken by Menzies after recent contract losses, management changes and a dividend cut. But it called on the company to “maintain a healthy dialog” on exploring all options to “unlock additional value, including a breakup.”
A spokesman for John Menzies was not immediately available for comment. On Thursday, the company declined to comment in response to the Lakestreet statement.
Kabouter is a small-cap equities manager, which says it seeks to invest in companies that are undervalued or misunderstood.