Cevian has discussed numerous operational and strategic opportunities to maximize shareholder value with the company's board and management, including, without limitation, opportunities to improve management.
Pearson is a UK-based learning company. This is Cevian's seventh investment in a U.K .Company having previously invested in: RSA (2013 to current), Vesuvius (2012 to current), Old Mutual (2008-2014), Wolseley (2010-2014), Cookson (2011-2012) and Alent (2012-2015). Its UK investment group is led by Lord Myners who joined Cevian as a partner in 2011. Myners was the Financial Services Secretary in the UK's finance ministry during the Labour Government of Gordon Brown from October 2008 until May 2010. He also served on the Prime Minister's National Economic Council and now sits as a crossbencher in the House of Lords. Notably, Myners was also formerly the chairman of the Guardian Media Group, publisher of The Guardian and The Observer newspapers.
Cevian has been following Pearson closely for several years. They believe that the company has a collection of leading businesses in attractive markets, but several of these businesses have yet to deliver on their full potential. Their analysis concludes that Pearson should outperform its competitors, and produce attractive, growing and predictable returns. This will require first-rate decision-making and robust execution. This will require a CEO with a clear track-record of shareholder-value creation, and the company's current CEO, John Fallon, announced last year that he will be retiring in 2020. The company is presently searching for his replacement and you can be sure that Cevian will want to actively work with the board to select the new CEO and help the company to realize its full potential.
CEO succession is one of the most important things a board does and one of the most potentially value-creating events for shareholders. It is a major lever for activists in helping to create shareholder value and we expect that Cevian will inject itself into this process, preferably from a board level.
Ken Squire is the founder and president of 13D Monitor, an institutional research service on shareholder activism, and the founder and portfolio manager of the 13D Activist Fund, a mutual fund that invests in a portfolio of activist 13D investments. Squire owns Pearson in the fund.