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Engine Capital takes a stake in Avantor. Activist sees several ways to create value

1. Engine Capital urges Avantor to enhance commercial and operational excellence. 2. Avantor's leadership has undergone significant turnover and dysfunction, impacting performance. 3. Engine suggests stock repurchases and cost-cutting as key strategies for improvement. 4. The company rejected an acquisition offer at a 20%-35% premium earlier this year. 5. Engine estimates Avantor shares could reach $22-$26 by 2027 with effective changes.

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FAQ

Why Bullish?

Engine Capital's activist involvement indicates potential for strategic improvements, historically yielding positive outcomes. Similar activist cases have resulted in share price recoveries post-restructuring.

How important is it?

The focus on operational efficiency and potential repurchases can stabilize and improve Avantor's stock performance, showing a clear path to recovery and enhanced shareholder confidence.

Why Long Term?

Significant changes proposed, like board refresh and operational excellence, will require time to implement successfully, as seen in other activist-led transformations.

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