London’s FTSE 100 was up 0.7% at 8,231.30 in afternoon trade on Thursday.
Smith & Nephew shot higher after activist investor Cevian Capital bought a 5% stake in the medical equipment manufacturer. Cevian now holds 43.9m shares in the company, making it the third largest shareholder.
Russ Mould, investment director at AJ Bell, said: “Cevian has previously taken positions in UBS, Vodafone and Aviva in an attempt to force change and the case for doing so at Smith & Nephew is presented by a near-40% decline in the share price over the last five years.
“The positive share price reaction to Cevian taking a position in Smith & Nephew demonstrates the market thinks an outside catalyst for a shake-up of the business would be no bad thing.
“The company was severely affected by the pandemic as elective procedures like hip and knee replacements were cancelled, reducing demand for its orthopaedic products. Lockdown also hit the company’s…
