Corvex Management, the activist fund run by Keith Meister, has built a stake in French yogurt maker Danone because it views the company as significantly undervalued, according to sources.
The New York-based hedge fund owns shares in Danone worth about €340m. The shares rose for a second day, up to 2.9% at one stage in Paris trading, leading gains in France’s CAC 40 Index. They are now up over 12% this year. Activist investors increasingly have European companies in their sights, and Dan Loeb’s purchase of a stake in Nestle has shown not even Europe’s biggest company is immune. Danone was previously a target in 2012, when Nelson Peltz bought a stake and sought tighter cost control.
“It’s incumbent on all of us as investors to be activist,” said Nicholas Melhuish, head of global equities at Amundi Asset Management.
“Activists often just end up verbalising a debate that has been going on behind the scenes between other investors and the company, but they do it in a much more dramatic way,” he said.
Corvex’s purchase would be its second high-profile European investment in as many months.
The fund teamed up with investment firm 40 North last month to raise its stake in Clariant to more than 10%, part of an effort to scupper the Swiss chemical company’s €5.7bn takeover of Huntsman.
Corvex believes Danone stock will rebound if management improves operations, the sources said.
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