ShellNews.net: Knight Vinke to target Europe: “Knight Vinke Asset Management, the activist shareholder leading the battle against management at media giant VNU, is seeking targets among Europe's 100 largest companies for its corporate activities in 2006.”: “It played a key role in shareholder victories at Royal Dutch Shell…”: Monday 9 January 2006
By Norma Cohen in London
Published: January 9 2006
Knight Vinke Asset Management, the activist shareholder leading the battle against management at media giant VNU, is seeking targets among Europe's 100 largest companies for its corporate activities in 2006.
Eric Knight, managing director of the asset manager, declined to spell out which companies he would be targeting, but said in an interview with the Financial Times that at least one may be a large UK stock. Knight Vinke has commitments for additional cash from investors of at least €150m and is in talks with several private equity investors who are seeking to invest alongside it.
The interest of private equity managers in activist shareholder managers suggests growing interest in stretching the techniques and analysis generally applied to private companies into the public market. KVAM and other activist shareholders typically hold shares of only a few stocks but spend energy formulating strategies to extract maximum value.
KVAM has recently retained Boston Consulting Group and Greenhill, the investment banking boutique, to help it develop alternative strategies for VNU.
Mr Knight said that the strategies and investment returns of KVAM were similar to those of private equity firms.
Flush with victories in three large European stocks last year, Mr Knight, KVAM's principal and founder, said the group was in talks with several private equity investors who were seeking to invest with it in the expectation of achieving returns through shareholder activism that are normally reserved for private equity.
The plan to step up its investment activities comes amid signs that shareholders in large European companies, which have been passive investors in companies, are no longer prepared to sit on the sidelines. The forced removal of Werner Seifert, the chief executive and chairman of Deutsche Börse, in May 2005 stunned much of Europe's corporate community and emboldened shareholders. "We are focusing on Europe's top 100 companies," Mr Knight said.
KVAM has €450m (£309m) under management and relies on working with institutional shareholders. It played a key role in shareholder victories at Royal Dutch Shell, Suez and its former 50 per cent owned subsidiary, Electrabel, and most recently at VNU where shareholders forced the management to back off what they viewed as a value-destroying acquisition. VNU scrapped its planned $7bn (€3.95bn) purchase of IMS Healthin November.
At Electrabel, KVAM discovered the Suez subsidiary had joint-venture arrangements with dozens of Belgian municipalities that were more valuable than appeared from the balance sheet. Suez ended up buying almost all the outstanding shares in Electrobel at a price analysts had believed was above its full value.
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