Jim Armitage: Investor activism has arrived over here for a reason

Time was, UK boardrooms said US-style shareholder activism would never happen here.

The City’s clubbability, they said, meant any disgruntlement between investors and boards was resolved in White’s or the RAC over a jolly good claret.

No more. Wall Street’s activists have for some years been finding rich pickings here, waking up sluggish boards.

With Nelson Peltz’s arrival at Ferguson today, two big companies are set to be forced into major restructurings, with Coast Capital pointing out obvious shortcomings at First Group.

At both, the key issue has been UK companies’ attitude to US assets. Peltz points out that Ferguson is a mainly US operation, yet its shares are listed in London.

The stock trades at a discount to its US peers because it is less visible among potential shareholders in its core market.

Though it pains Londoners to admit it, this logic is hard to dispute — Ferguson would probably command a better share price if it listed on Wall Street.

Similarly, as Coast has argued, First’s US bus assets are clearly better off hived into a US company with more focused management.

Neither are new ideas — investors have long talked about them — but it has taken US activists to focus minds.

Marks & Spencer

As M&S gets the funding to jump into bed with Ocado, Morrisons strikes a canny deal with Amazon.

Having trialled same-day delivery with Amazon a few months back, it’s now expanding it to new cities. Mozzas could do this because last month it made Ocado relax its exclusivity on online deliveries in return for help recovering from the Andover fire.

Smaller than the M&S deal, yes. But clever, fleeter of foot and very cheap for shareholders.