Activist Investor Elliott Management Takes Stake in Builder Taylor Wimpey

(Bloomberg) -- Activist investor Elliott Investment Management called on Taylor Wimpey Plc to shake up its management, blaming the homebuilder’s lagging share price on “the collapse in investor confidence in the company’s leadership in recent years.”

In a letter to Taylor Wimpey’s board, the U.S. fund said it is one of the company’s top five shareholders and wants at least two new independent directors to be appointed. It is also pushing for a new committee to be formed to advise on operations.

“A series of operational and strategic missteps has resulted in persistent share-price under-performance, leaving shareholders frustrated and lacking confidence in the company,” Elliott said in the letter.

The disclosure comes after Taylor Wimpey Chief Executive Officer Pete Redfern announced earlier this week that he will be leaving the firm. At the time the stock was 29% below its pre-pandemic peak, and the shares have failed to keep pace with Britain’s booming housing market.

The U.S. fund said Taylor Wimpey’s focus on large sites had contributed to the under-performance, saying it had led to “cost overruns and sale-price erosion” that has hurt both margins and volumes.

Elliott said a total return of more than 70% could be delivered over the medium term by improving the company’s performance on sales prices and costs among other measures. The fund also wants Taylor Wimpey to focus on external candidates to replace Redfern.

“We have not met with Elliott and prior to today’s published letter we have not had any proposal from them,” a spokeswoman for Taylor Wimpey said in a statement. The homebuilder’s shares closed down almost 1% in London on Friday.

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