Aviva Share Discussion Threads

[1robbob] 08/6/2021 15:00

Thoughts on today's announcement

1) The likelihood of the Return of Capital being primarily achieved by a Share Buy-Back Programme, must have receeded considerably.

As it is unlikely that a meaningful number of shares could be purchased with an Activist Shareholder in place

Also, the Board have a dilemma - The more they reduce the number of shares in issue the larger Cevian stake becomes in % terms !!

2) Cevian have effectively put AV in play at 700p (800p discounted baack at 5% for 3 years)

I strongly think that the Board (Culmner and AB) and the Large Shareholders - now including Cevian - have all along been working on a 700p exit for AV, ever since Tulloch's disasterous 'Business Review' and his subsequent removal.

[engelbert1969] 08/6/2021 14:40

Aviva and why some companies are wary of special dividends

[bg23] 08/6/2021 13:15

it does seem to me that Cevian are pushing against an open door with their 'activist stance' the only thing I can see is that they are looking for increased cost cutting, aka, redundancies and staff efficiencies.
Surely its easy to tell a story thats already been told. the only thing that is in their favour is that they have put other peoples money where their mouths are.

ps. I've held for the last 7 years or so, so below entry level, even with income, but happy to continue to hold.

[scrwal] 08/6/2021 12:50

£8 and 45p div in 3 years seems an unlikely target for the pared down company especially if most of the cash is "distributed" to shareholders. It's like they have just doubled the current figures.

At least I am now in a profit , temporarily.

[eurofox] 08/6/2021 12:46

The journey is just beginning.

[oggyrocks] 08/6/2021 12:38

Makinbucks - seem like they have built their position in last 6 months.


Cevian, which manages more than $16bn on behalf of about 350 pension funds, endowments and other global investors, started building its Aviva stake early this year, according to a person familiar with the matter. With a 4.95 per cent holding, the Swedish group is now Aviva’s second-largest shareholder after BlackRock.

[father jack1] 08/6/2021 12:36

Cevian are talking a good game but one wonders what their position would be if a heavyweight tables a 600p offer? Still, they pushed it through the 420 barrier.

[1robbob] 08/6/2021 12:21

I wonder what the Charts say now !!!!!!!

[eurofox] 08/6/2021 11:39

Anyone can see that this stake has been built over a period of weeks, all they had to do was sit on the bid and gradually accumulate what was being sold by bored investors and end-of day day traders. Pepper it up by removing the bid altogether occasionally, so that day traders are relieved of their shares even more quickly by their own nervous momentum and bob's your uncle.

[makinbuks] 08/6/2021 10:53

Do we know when Cevian acquired a 4.95% stake? Doesn't seem to have been a recent announcement and not mentioned in the FY20 Accounts

[anthony100] 08/6/2021 10:48

Ha

God bless Carl Icahn.This might put Av. On the buy radar...at last.

£5 and I'll start buying better wine to swig at night.

[spud] 08/6/2021 10:35

I've had a buy order @ 410p in the Market for my Share ISA which I'm hoping was triggered yesterday. I also had a sell on 4k in my trading account @ 420p. Once I've finished my coffee I'll go upstairs to the study & check. spud

[meijiman] 08/6/2021 10:32

They are right to say that this company has been poorly managed..but the new lady seems to be making a decent fist of it so far.

[engelbert1969] 08/6/2021 10:28

Lucky with the timing of my transfer from Pru fund to SIPP last week. Quadrupled my total holding in AV. Plenty of upside still for me (esp after this morning's news) and looking for the long term so expecting it to be a while before I have to make any exit decisions.

[muscletrade] 08/6/2021 10:26

@careful, potential share price growth of 100% over three years and over doubling the dividend.
Whats not to like. Depends on your buying price of course but it is a strong hold for me it was strong buy back in November. I would buy more on any weakness but I have loads of Aviva already and expect my dividend yield to be 14% in a 2/3 years. Thats before any capital return and share price improvement. Happy days with Aviva and has been since Blanc arrived.

[rcturner2] 08/6/2021 10:08

From the Guardian live feed:

Shares in UK insurance firm Aviva have jumped 3.6%, after activist investor Cevian took a 5% stake - and started pressing for change.

Cevian, Europe’s biggest activist investor, is pushing for Aviva to make deeper cost cuts, and return £5bn to investors following recent asset sales.

Christer Gardell, Cevian’s co-founder, says:

“Aviva has been poorly managed for many years, and its high-quality core businesses have been held back by high costs and a series of bad strategic decisions.”

Shares in Aviva have gained 14.7p to 425p this morning, their highest since January 2020, just before the pandemic.

Aviva has been selling off international assets since CEO Amanda Blanc took the helm last summer, and pledged to focus on larger businesses in the UK, Ireland and Canada.

But Cevian argues that Aviva’s share price could climb to more than £8 within three years, if it returned excess capital to shareholders through dividends or buybacks.

The FT has more details...

Aviva has promised substantial returns and cost reductions as central planks of its strategy shift under Blanc, who has told investors that her mantra is to move quickly.

However, Cevian wants a specific return of £5bn in dividends or buybacks of capital that the insurer has in excess of regulatory requirements

The activist fund also believes that the cost-cutting can go further, calling for reductions of more than £500m from Aviva’s annual cost base by 2023, compared with the management’s target of £300m. It is also pushing for a leaner management structure, according to a person familiar with the matter.

[richie1218] 08/6/2021 10:07

a bit of info on Cevian capitals strategy.

Cevian (i) acquires substantial minority ownership positions in undervalued European listed companies and (ii) works with the boards and management teams of those companies to advance initiatives designed to increase their long-term competitiveness, profitability and sustainability.

It works in a hands-on and constructive manner to advance improvements in operations, corporate strategy, organizational structure, financial management, corporate governance and ESG more broadly.

This work is designed to create real long-term value that benefits all stakeholders, including shareholders.

Cevian generally invests in sound companies that are overlooked, misunderstood or out-of-favor with investors. It commonly acts as a reference shareholder, an anchor shareholder, or an external catalyst for change, depending on the situation.

Cevian manages a concentrated portfolio of significant minority ownership positions in c. 10-15 publicly-listed companies at a time. It is typically the largest or second largest owner of its portfolio companies. Cevian has a clear vision of the potential of each of its companies, and commonly maintains its commitment to companies for 5+ years.

Cevian’s optimal investment size is EUR 500m to EUR 1.5 billion per company, though larger investments are not excluded.

[skinny] 08/6/2021 09:45

I used to trade these back in the 'olden days', but I last bought these and LGEN @11 years ago - AV are now just about even - plus accumulated dividends equal to the purchase price.

LGEN - well that's a different story.... +180% and @+120% of purchase price in dividends.

Well overdue!

[rcturner2] 08/6/2021 09:44

This point has been discussed to death. There is clear academic research out there which shows that the more you trade the lower your returns.

[spawny100] 08/6/2021 09:38

Maybe too careful careful? Fwiw I lumped all my spare cash in here this morning.

[careful] 08/6/2021 09:35

Buy and hold or try to time the cycle?

I still can't work out my own position on that one.

I know investors who have never sold a share, take the dividends, service rights issues etc,
They do ok.
Some companies will fail, others will grow and prosper.

Another investor I know has a 10% strategy.
He buys, as soon as he achieves 10% he sells.
A sort of 'stop gain' strategy as opposed to stop loss.

He does very well, and gets many 10%.
..but has to live with watching a disposed share double.

Right now I am pleased with my Aviva holding but will not add more.
I have a high % of cash, but cannot see anything I fancy enough to buy.
It takes an odd investor to hold cash right now. It yields nothing, dividends are much higher in shares and there is growth potential.

Maybe I should get some backbone and place the lot on Aviva.
Am I a man or mouse?
"Pass me the cheeseboard".

[whatsup32] 08/6/2021 09:29

I sometimes wonder if we are giving AB too much credit . All she's been asked to do was to sell the family silver something she is doing at pace . Surely not too difficult.

Had she been charged to grow the business/profits she may have found it more challenging .

[dr biotech] 08/6/2021 09:25

Cevian have a bit of a track record - they were one of the drivers behind the RSA breakup and sale.

[wskill] 08/6/2021 09:23

late in the day for all the clever people to be advocating AV. is now in buy territory we have known this since Tulloch was shown the door.

Where were they when we were between £2 and £3 Cevian are correct the company has been poorly managed for some years now. I am sure they can help the company find direction and pay us long term holders decently for waiting it out, crazy time time to contemplate selling now that we are just coming into play.

I do wonder if this was the reason that AB was moving with such Pace in selling.