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Exclusive: Investor Gatemore pushes for break-up of logistics firm Wincanton

Reuters  |  LONDON 

By Ben Martin

LONDON (Reuters) - Capital Management has built a stake in and called on the British logistics company to break itself up by selling one of its two divisions, according to a letter sent by to its own investors.

The asset management firm, which often pursues activist campaigns at companies where it has bought shares, said in the letter it had built a 2 percent stake in

believes the company, which has a market capitalisation of about 284 million pounds ($406 million), is "a sleeping giant whose intrinsic value is underestimated by the market," according to the investor letter seen by

traces its roots back to 1925, when it started as a milk distribution business, and has since grown into a haulage and warehousing company with a fleet of about 3,600 vehicles.

It is organised into two main divisions, a business that supplies grocers and general retailers, and a construction and transport business that handles such as bricks and fuel.

The firm's retirement scheme had a deficit of 69.3 million pounds at the end of September, a shortfall that a division sale would help to resolve, according to Gatemore.

"We have engaged in constructive discussions with Wincanton's management and, in private, are calling for the company to conduct a strategic review, sell one of its two divisions, fund the pension, and refocus the business," Liad Meidar, Gatemore's managing partner, wrote in the letter.

"In due course, we will discuss our ideas with other large shareholders and seek their support in promoting productive change in the company."

A for Wincanton did not immediately comment.

Gatemore is familiar with the British logistics market, having built a 24 percent stake in courier and logistics business DX Group, overhauled its board, and helped the firm with financing.

Its proposal for Wincanton comes amid a rise in activist investment in Britain, aimed at boosting returns for shareholders.

Recent campaigns include a push by U.S. hedge funds Elliott and for leisure company to split its Costa from its Inn business, and an unsuccessful attempt by to force to lift its takeover offer for

($1 = 0.6993 pounds)

(Reporting by Ben Martin; Editing by Mark Potter)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Mon, April 16 2018. 17:08 IST