ELLIOT CONSOLIDATES ITS STAKE

BILLIONAIRE Paul Singer’s Elliott Management pounced on another European corporate icon, building a stake in Pernod Ricard in an effort to boost returns and sharpen governance at the world’s secondlargest distiller. Shares of the owner of Jameson Irish whiskey rose as much as 4.3 percent in Paris trading, the biggest gain in more than three years, after the activist investment firm said it held more than 2.5 percent. The announcement comes just days after people familiar with the situation said Elliott accumulated a stake in Germany’s Bayer to press management to consider a split. Pernod Ricard offers one of the industry’s most attractive investment opportunities because “inadequate corporate governance and a lack of outside perspectives” have led to lacklustre performance, Elliott said. The firm cited the disappointing takeover of Absolut and operating margins lower than those of rival Diageo. Eventual options could include a sale of the French company, a person familiar with the situation said. Facing off with Elliott could be a challenge for chief executive Alexandre Ricard, the third-generation member of one of the founding families to run the company. The activist’s arrival is one of the biggest potential threats to the ownership structure since Ricard merged with Pernod about four decades ago in fusion of two makers of the French anise-flavoured spirit pastis. Elliott has been building the stake over the past year and its London-based investment team has met Pernod’s management in recent months. The discussions are said to have focused on efforts to step up cost-cutting, as well as marketshare losses in vodka. “We would see any improvement as a result of Elliott’s stake as a material positive for the company,” James Edwardes Jones, an analyst at RBC Capital Markets, said in a note to clients. “We continue to think the valuation does not provide an attractive entry point.” I Bloomberg