Ferguson Shares Rise

Shares of Ferguson (FERG.L), the world’s largest distributor of plumbing and heating products, jumped after activist investor Nelson Peltz’s Trian Fund Management disclosed early on Thursday the acquisition of a 5.98% stake in the company for $935 million.

Trian, which invests in underperforming and undervalued public companies, has contacted members of Ferguson’s management team and “looks forward to working with them” to implement initiatives that it believes can create long-term shareholder value, according to a statement.

“Trian believes that Ferguson — formerly known as Wolseley — is an attractive business that trades at a discount to comparable US peers,” the statement noted.

Trian’s board noted that it previously approved Trian’s recommendation of a potential investment in Ferguson, and as of June 12, 2019, said that it had invested approximately 250 million pounds ($317 million) in Ferguson through the partnership, at an average cost basis of 52.85 pounds per share.

Earlier this month, Ferguson reaffirmed its full-year guidance and set out a $500 million share buy-back program after fiscal third-quarter sales and trading profit jumped.

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