Smith & Nephew, one of the leading medical equipment makers and the artificial hipmaker for Andy Murray, saw its shares surge more than 8% after activist investor Cevian Capital disclosed a stake of around 5%. Cevian has a history of taking positions in companies to force change and improve performance. Smith & Nephew has seen a near-40% decline in its share price over the last five years, affected by the pandemic and a struggling post-Covid recovery.
The market’s positive reaction to Cevian’s involvement with Smith & Nephew suggests that investors believe an outside catalyst could benefit the company. Cevian might push for more ambitious improvement targets and a rationalization of the company’s portfolio. This could lead to changes in the company’s sports medicine and wound care segments, along with orthopaedics.
In the broader market, the FTSE 100 index gained 80 points to 8251, driven by weak jobs data from the US and expectations of interest rate cuts by the Federal Reserve. Despite the upcoming UK general election, market reaction is expected to be relatively muted, with investors focusing on the potential policies of a new government regarding public spending and economic growth.
Meanwhile, the EU is preparing to impose tariffs on imports of electric vehicles from China, aimed at addressing the influx of cheap Chinese-made EVs into the market. While the tariffs could lead to retaliatory measures from China, intense negotiations are ongoing to find a mutually beneficial solution. European carmakers like Volkswagen and Stellantis have expressed concerns about the impact of these tariffs on their businesses.
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