1/3/2026
Why Activists Are Barging In on Britain’s Biggest Brands
Sunday Times (London) (01/03/26) Treanor, Jill
As chairman of the London-listed property company Palace Capital (PCA), dealing with the gripes of shareholders comes with the territory for Steven Owen. But receiving a letter from one of your biggest investors to say they want to boot you out of your job is perhaps not how he wanted to begin the year. The move by the Swiss-based Lake Street Capital Partners is emblematic of the sort of activism facing a growing number of companies — big and small — listed on the London Stock Exchange. FTSE 100 oil giant BP (BP) is widely believed to have accelerated the appointment of its new chief executive under pressure from Elliott, while Domino’s (DOM), the pizza delivery business, is facing calls from its own investor, Browning West, to return more cash to shareholders. More important, experts say this is just the tip of the iceberg and that more campaigns will emerge in 2026. Activists — many based in America — are primed to barge in on some of Britain’s biggest brands. On the face of it, the trend might seem counter-intuitive. London-listed stocks are riding high, with the FTSE 100 last year enjoying its best performance since 2009. On Friday, the blue-chip index extended its gains by touching 10,000 points for the first time. Yet the success of UK shares is the very reason for the growth in activist campaigns, say City advisers. Such a backdrop makes it easier for activists to pick out the underperforming companies on the market. Paul Kinrade, senior adviser at the professional services firm Alvarez & Marsal (A&M), said: “Activists want to see a positive market because they don’t fight against a tide; they’d rather run with a tide.” A&M’s annual assessment of activism, seen exclusively by The Sunday Times, said that while the number of activist campaigns fell last year, it expects a rise in engagements on London-listed companies this year — particularly those in the consumer sector. “The UK, already the most targeted geography in Europe, will become an even greater focus for active and activist investors,” said Kinrade. “This is partly driven by the activist investors returning to the market they know best when markets are in turmoil, but also as they move towards the consumer sector, where the UK market is overweight.” Companies reliant on consumers are already feeling the heat. As well as Domino’s, bakery chain Greggs (GRG) has two activists on its register after its shares plunged 40% last year. Silchester, renowned for its silent activism, has a 5% stake, while Singapore-based Lauro Asset Management is urging the chain to cut costs to avoid a takeover bid. In contrast, Upper Crust owner SSP (SSPG) is said to have been under pressure from New York investor Irenic Capital to find a takeover to boost its value. Then, as last year drew to a close, Premier Inn owner Whitbread (WTB) was pressed by investor Corvex to review its strategy. Falling interest rates, and hopes of increased consumer spending, explain why some of the big brands will be moved into the activists’ crosshairs, A&M said. Kinrade also pointed to the cost efficiencies that these consumer groups could find from artificial intelligence, which will be another point of focus for activists. “It’s about adoption and implementation of AI in those corporations in a super-efficient way and the opportunities it brings.” Experts say that more than 40% of the activism in London-listed companies last year was from American investors — the fifth successive rise, according to A&M — which is a trend that others expect to continue. Tom Matthews, head of the European activism practice at law firm White & Case, said: “The UK market has various features that are attractive to US investors: we speak the same language, have a common law system, are closer to them time-wise and have a relatively strong shareholder rights.” For instance, investors can call a vote with 5% stakes. The big American names rattling London-listed companies include Nelson Peltz’s Trian. The veteran investor has held a seat on the board of FTSE 100 consumer group Unilever (ULVR) since 2022 and last year was regarded as being instrumental in the spin-out of its ice cream business Magnum (MICC) on the Amsterdam stock exchange. These spin outs are classic examples of the type of action that activists demand in an attempt to release value and increase the company share price. Elliott provides another example. As well as pushing for changes at BP (BP), Elliott endorsed the effective break up of the London-listed industrial conglomerate Smiths (SMIN) through the sale of its electrical connectors business and its baggage scanners arm. But last year’s most notable intervention by an American investor was the attack on the investment trust sector by the poker-playing American hedge fund tycoon Boaz Weinstein and his firm Saba Capital. Weinstein has positions in as many as 30 investment trusts, one of which is the Edinburgh Worldwide Investment Trust (EWI), where he has forced a vote later this month to sack its entire board. Managed by the Scottish fund manager Baillie Gifford, EWIT is known for its investments in global companies, notably Elon Musk’s SpaceX. City sources said it is not just American investors who are making their presence known. Swedish investment firm Cevian has held a stake in FTSE 100 publisher Pearson (PSON) for five years and is pushing for changes at medical equipment maker Smith & Nephew (SN). Matthews at White & Case noted that traditional activists no longer have this field to themselves: “It’s not just hedge funds; the activism playbook is being deployed by many other types of investors — for example, private equity, credit funds and family offices.” Billionaires could be added to the list, with candidates such as Martin Ebner’s Patinex, which has a stake in FTSE 100 telecoms group Vodafone (VOD), and India’s Sunil Bharti Mittal with a 25% stake in BT (BT.A). Boards can view activists with suspicion as they may fear for their own positions. Take Saba, for instance: its focus on the investment trust sector has involved some personal engagement. Directors also face the prospect of having to explain why they do not agree with analysis put forward by activists. Kunal Gandhi, senior managing director at Fenchurch Advisory, stressed: “What companies don’t want to waste time on are non-researched views which don’t have a lot of substance behind them.” Matthews, though, said boards could see it as getting good-quality advice without having to pay for it: “Activism done well is a force for good … Unlike private equity, who typically buy the whole company and then seek to improve it, activists buy a minority stake — for example, 3 to 5% — and then deploy their energies and incur costs to push for change in a manner that benefits all the other shareholders, too. “Companies can certainly extract benefit from activism by thinking about it in the right way. In a sense, it can be a bit like free management consultancy.” Gandhi said even the threat of activism is having an influence in boardrooms — whether there is an activist present or not — as companies know what these investors are looking for in their targets: a lower valuation than peers; insufficient strategic actions; and rivals doing more. “This is why when boardrooms announce strategy days, you can see an increased level of [financial] guidance,” he said. “You can call most investors activists these days and … boardrooms and management teams have [now] become their own self-activists.” Associated British Foods (ABF), one of the stalwarts of the FTSE 100, might be an example of this as it considers whether to spin out its Primark clothing chain. Gandhi expects a new wave of activism that moves beyond traditional demands to cut costs or look at capital allocation — and looks more into the strategic direction of the company. “In 2024-5, a lot of the demands were around capital returns and cost cutting. As we go into 2026, those themes are evolving,” he said. “They are looking into [issues such as] is the strategic direction right, have we got the right management in place?” While the data from Alvarez & Marsal showed a drop in public campaigns by activists last year on the London market, due to the uncertainty created by Donald Trump’s tariffs on American imports, City advisers reckon pressure is increasingly being applied behind the scenes. Activists can go unnoticed by the wider world if they keep stakes below the thresholds at which they have to disclose them for regulatory purposes — usually, 3% or 5%. They also use derivatives such as equity options and swaps to quietly increase their stakes. “The balance has shifted towards more private engagement and fewer publicly observable campaigns,” said Matthews, who reckoned this was a sign that Britain’s approach to activism is becoming more sophisticated than it was several years ago, when activism was a newer phenomenon. “People often talk about activism being like the tip of an iceberg: the bulk of the iceberg sits underneath the water and that’s the private engagement that goes on all the time.” Try telling that to Owen at Palace Capital. He is starting 2026 with a very public focus on his tenure — and may have some justification for feeling a little hard done by. One of Lakestreet’s main gripes is that costs are too high at a company that is winding down, selling off investments and returning the cash to shareholders. Since July 2022, Palace Capital has sold more than £160 million of assets, repaid all its bank debt and returned over £64 million of cash to shareholders. Rightly or wrongly, this is evidently not enough for Lakestreet.
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