FRANKFURT (Reuters) -Elliott Investment Management has taken a stake in Fresenius SE, a person familiar with the matter told Reuters on Wednesday, sparking speculation the activist investor might push for a break up of the diversified healthcare company.
Fresenius and Elliott were not immediately available for comment. Shares in Fresenius, which is controlled by charitable trust Else Kroener Fresenius-Stiftung, were up 9% at 1202 GMT.
Before the news, shares in Fresenius had lost about 40% this year, in part because of ballooning costs at subsidiary Fresenius Medical Care.
Bloomberg earlier cited people familiar with the matter as saying Elliott would work towards a break-up of the group.
Fresenius SE’s long-serving Chief Executive Stephan Sturm left this month and was replaced by the former head of its drugs unit, after the company’s earnings were hit following the COVID pandemic and a surge in costs at FMC.
New CEO Michael Sen gathered experience in corporate restructuring in past roles as a management board member of Siemens and finance chief of E.ON.
He said in a video posted online by the company this month that nobody could be satisfied with the group’s performance and recent share price performance and he would chart a new course.
“Preparing Fresenius for the coming decades, requires fundamental change,” he said.
Elliott, which is known to make purely financial as well as activist investments, will have to contend with the Else Kroener Fresenius foundation.
Though holding only 27%, it has control over strategic moves and executive personnel decisions thanks to Fresenius’s particular legal structure as a German KGaA.
The foundation did not immediately respond to requests for comment.
The size of Elliott’s stake remained unclear. Under German securities trading laws, investors are required to disclose holdings in listed companies when they cross thresholds ranging from 3% to 30%.
Shares in separately listed FMC, the world’s largest kidney dialysis provider, were up 4.6%.
Fresenius, which also runs hospitals, makes generic drugs and helps plan hospital construction projects, has said net income would decline this year.
($1 = 0.9805 euros)
(Reporting by Ludwig Burger, Patricia Weiss and Hans Seidenstuecker; Editing by Kirsti Knolle and Mark Potter)