Activist investor Elliott builds share of Taylor Wimpey

Now US raider Taylor Wimpey is building stock: Activist investor Elliott targets £6bn construction giant after battles with GlaxoSmithKline and SSE

  • City sources said Elliott Management has taken shares in Taylor Wimpey
  • Elliott specializes in buying stocks and then acting for change to increase their price
  • It marks the third time this year that Elliott has been associated with an FTSE100 company

The world’s most powerful activist investor has secretly bought a stake in Taylor Wimpey, sparking speculation that the FTSE100-listed homebuilder could become a £6bn takeover target.

According to sources in the city, Elliott Management has bought shares in the construction company – one of Britain’s largest residential developers – after the company’s share price faltered this year, despite feverish demand for new homes.

Elliott, also known as Elliott Advisors, specializes in buying shares in publicly traded companies and then agitating them for accelerated change to increase their share prices.

On the radar: City sources said Elliott bought shares in Taylor Wimpey after the company’s stock price faltered

The attack on Taylor Wimpey is the latest battle brewing for the activist who once famously convinced a court to detain an Argentine naval vessel amid heated negotiations over government debt repayment.

It marks the third time this year that Elliott has been associated with an FTSE100 company after building a stake in the energy group SSE and pharmaceutical giant GlaxoSmithKline.

It turned its attention to construction companies in April this year and supported Berkeley DeVeer’s acquisition of Avant Homes, one of Britain’s largest private home builders.

The deal put controversial builder Jeff Fairburn, who has a controlling interest in Berkeley DeVeer and becomes chairman of Avant Homes, back at the center of housing development after the former CEO of Persimmon was ousted in 2017 after accepting a £75 bonus. million.

Last month, Elliott took short positions in Bellway and Barratt, expecting their stock prices to fall. It’s not yet clear whether Elliott’s move to Taylor Wimpey – who builds 15,000 new homes a year and has been led by CEO Pete Redfern since 2007 – is related to the Fairburn deal. The size of the bet is also a mystery.

Many of Elliott’s past investments in activists have resulted in significant business activity. City sources speculated that Elliott’s move on Taylor Wimpey could lead a US-based suitor to make a multi-billion-pound bid for some or all of the group.

This year, Elliott also bought a 5 percent stake in AIM-listed Clinigen, a drug distribution company that issued a profit warning this summer. Reports in September suggested that after building the stake, Elliott held talks with Clinigen executives about breaking up the company and selling some of its divisions.

A Sky News report claimed Elliott was willing to engage in a “hostile” campaign with Clinigen. Last week it emerged that Clinigen had received a £1 billion takeover bid from private equity firm Triton Partners.

Elliott has also become a major shareholder of GlaxoSmithKline and has made a series of controversial demands on the pharmaceutical giant’s board.

So far GlaxoSmithKline chairman Sir Jonathan Symonds has supported CEO Dame Emma Walmsley and rejected Elliott’s demands. In August, The Mail on Sunday revealed that Elliott had acquired a stake in SSE, the Footsie-listed energy giant that powers the homes of five million Britons.

Reports then surfaced claiming that Elliott had pushed SSE’s management to break itself in half by divesting its renewable energy unit.

However, that call was turned down by SSE, which instead plans to double down on a strategy to transform into a major renewable energy player.

Three years ago, Elliott bought a huge stake in Premier Inn operator Whitbread and urged the company to sell its Costa Coffee chain. Four months later, Coca-Cola agreed to buy Costa Coffee from Whitbread for £3.9 billion.

And last year, AstraZeneca paid $39 billion (£29.4 billion) for US drug group Alexion Pharmaceuticals after Elliott repeatedly urged the US-listed company to sell itself to a potential buyer.

Elliott was founded in 1977 by Republican donor Paul Singer with $1.3 million donated by friends and family. It now has approximately $48 billion under management and Singer’s personal net worth is estimated at $4.3 billion. His son Gordon runs the London office and is believed to be behind the firm’s largest investments in Europe.

In addition to buying and selling stocks, Elliott also invests in commodities, private companies and debt, including distressed bonds from distressed companies and struggling countries, which has caused occasional controversy.

Taylor Wimpey and Elliott both declined to comment.