Premier Farnell is being targeted by an activist investor according to report in the UK’s Daily Telegraph newspaper.
GO Investment Partners, a company with offices in London and Tokyo, has taken a 3.24pc shareholding in the distributor.
The Premier Farnell stake has been bought by GO’s European Focus Fund described on GO’s website as “a constructive activist investment fund that seeks to add significant value for clients by acting as a catalyst for corporate change in quoted small and mid-cap European companies”.
So what can Premier Farnell expect hear from its new shareholder? There are a range of options. Activist shareholders can lobby to have a non-executive director on the board to get its views heard on how it thinks the business should be managed.
At Premier Farnell the more obvious course would be to demand the sale of Akron Brass, a subsidiary that specialises in the manufacture of fire-fighting equipment – useful if the Farnell warehouse is burning down – otherwise a very different business from component distribution.
The more intriguing possibility is a merger with long-time, UK-based competitor Electrocomponents, owners of the RS Components brand. Electrocomponents recently named former Future Electronics senior executive Lindsley Ruth as its new Chief Executive Officer replacing Ian Mason as it seeks to revitalise the business.
Both companies’ share performances have stagnated, at best, as a result of recent lacklustre results, despite the success of the Raspberry Pi computer which both companies sell.
They have also been subject to fierce competition from US-based competitors Digi-Key and Mouser Electronics, both of which are focused entirely on the electronics market.

Author

Comments are closed.