Volvo targeted by predators
Johansson: keeping the powder dry
According to the Financial Times, a group of new investors has been making moves over the summer to acquire a 5% stake in the giant Volvo Group.
Volvo, which has excess funds of around Kr19bn (?3.1bn) has pre-empted the moves by outlining plans for a series of acquisitions to broaden its product range, says the FT.
Christer Gardell, Cevian's managing partner, is demanding a seat on Volvo's board and has called for a radical restructuring of its balance sheet, claiming it is at least 50% undervalued.
Swedish fund management company Oresund, which has a 1% stake in Volvo, also stepped into the fight by agreeing Volvo was being too conservatively managed and was undervalued.
According to the FT, Oresund chief executive Mats Qviberg suggested Volvo could sell Volvo Penta and its aerospace arm, and redistribute the cash generated to its shareholders.
Analysts have dismissed a potential takeover scenario as unlikely, but Leif Johansson, Volvo's chief executive, told the FTthat the company is "keeping the powder dry" for when Volvo encounters structural changes in the industry.
Volvo is itself on the acquisition trail, according to Johansson. The FT says potential targets range from Nissan Diesel to Chinese truck maker Dongfeng and "further acquisitions in Russia".
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