Rolls-Royce eases break-up fears

The San Francisco-based ValueAct became Rolls’ largest shareholder last month when it snapped up a 5.4 per cent stake

Jamie Dunkley
Monday 10 August 2015 01:46
Comments

Rolls-Royce’s new boss, Warren East, has played down fears that the US activist investor ValueAct is going to lead a break-up of the FTSE 100 engineering giant.

The San Francisco-based fund became Rolls’ largest shareholder last month when it snapped up a 5.4 per cent stake. Analysts believe it is likely to push for a seat on the company’s board and put pressure on it to accelerate a cost-cutting programme within its core aerospace division.

However, in a memo to staff, Mr East, who recently took over from John Rishton, said: “The activist shareholder has caused a lot of speculation in the press, some of which I understand appears concerning as it talks about break-ups and spin-offs.

“I suggest we engage with the activists rather than shy away, properly explain our plans and the opportunities, and get them aligned with our agenda.”

ValueAct is run by Jeffrey Ubben and manages more than $18bn (£11.6bn) in funds. It has forced changes at companies including Microsoft and Sara Lee.

Mr East and his finance director, David Smith, have already met with ValueAct.

“Whilst with some activist interventions such dramatic outcomes do indeed occur, mostly these people are simply capitalists seeking the opportunity of a business in some kind of transition,” Mr East added.

Register for free to continue reading

Registration is a free and easy way to support our truly independent journalism

By registering, you will also enjoy limited access to Premium articles, exclusive newsletters, commenting, and virtual events with our leading journalists

Please enter a valid email
Please enter a valid email
Must be at least 6 characters, include an upper and lower case character and a number
Must be at least 6 characters, include an upper and lower case character and a number
Must be at least 6 characters, include an upper and lower case character and a number
Please enter your first name
Special characters aren’t allowed
Please enter a name between 1 and 40 characters
Please enter your last name
Special characters aren’t allowed
Please enter a name between 1 and 40 characters
You must be over 18 years old to register
You must be over 18 years old to register
Opt-out-policy
You can opt-out at any time by signing in to your account to manage your preferences. Each email has a link to unsubscribe.

Already have an account? sign in

By clicking ‘Register’ you confirm that your data has been entered correctly and you have read and agree to our Terms of use, Cookie policy and Privacy notice.

This site is protected by reCAPTCHA and the Google Privacy policy and Terms of service apply.

Join our new commenting forum

Join thought-provoking conversations, follow other Independent readers and see their replies

Comments

Thank you for registering

Please refresh the page or navigate to another page on the site to be automatically logged in