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Smith & Nephew (NYSE:SNN) ADRs traded higher premarket Friday after the U.K.-based medical device maker disclosed an ownership stake from Swedish activist investor Cevian Capital.
In a regulatory filing on Thursday, Smith & Nephew (SNN) said Cevian held a 5% stake in the London-listed firm as of July 2.
“Smith & Nephew owns fundamentally attractive businesses in structurally growing markets, but the company has not generated shareholder value for many years,” The Financial Times reported, quoting Friederike Helfer, a partner in Cevian.
“Cevian sees the potential to create significant long-term value by improving the operating performance of the company’s businesses,” she added.
Smith & Nephew (SNN), an FTSE-100 component, said it had “an open dialogue with our shareholders and will continue to engage with Cevian, as we do with all of our shareholders.”
Cevian’s stake comes at a time when Smith & Nephew (SNN) shares have dropped more than 40% over the past five years amid supply-side constraints and multiple leadership changes.