A large investor supports the President of Vodafone after the entry of the active investor

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One of Vodafone’s largest shareholders has backed CEO Nick Read’s plans to overhaul the telecom giant despite pressure from an activist investor.

Abrdn, the fourth-largest investor, said Vodafone’s management had been “candid” about how it plans to enhance value and had “widespread shareholder support”.

Swedish activist investor Cevian Capital has taken a stake in the FTSE 100 and has held talks with management in recent weeks about how to improve performance, as it struggles with a weak share price.

It is understood that Cevian’s discussions with management centered around proposals to streamline Vodafone and make it a more focused company.

Mr. Reed has been urging competition regulators to open the doors to industry consolidation to boost returns as he weighs a European integration across Italy, Spain and Portugal.

The move comes on the heels of efforts to turn Vodafone into a much simpler company focused on Europe and Africa, from dismantling its towers into an independent business and offloading marginal operations in New Zealand, to writing down the value of its joint venture in India.

Andrew Millington, head of UK equities at abrdn, said: “Vodafone’s management has made clear in recent months its intention to explore ways to create value through in-market consolidation or tower consolidation. While I don’t have much insight into Sevian’s plans, I think this approach has support. wide range of shareholders.

Vodafone’s shares have fallen by a third over the past five years amid stalled momentum and weak growth in several of its key markets.

However, the stock rose as much as 5% after news that Cevian had built a stake, to close 2% higher at 130.2p, valuing the company at just over £35 billion.

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