Ruthless hedge fund takes 5pc stake in Saga

SHAReS in Saga surged 13pc after it was revealed that activist hedge fund elliott Management has bought a stake.

The move by elliott, run by ruthless Wall Street billionaire Paul Singer, could herald a campaign for major changes in the troubled British insurance and travel group.

elliott’s 5.1pc stake emerged after Saga shares hit all-time lows last month, when bosses warned it was being pummelled by tough competition.

The hedge fund is known for tough tactics to force through changes at companies it believes are underperforming.

It famously had one of Argentina’s naval ships seized after the Government allowed debt payments to lapse.

Saga provides services to over-50s such as car and home insurance, as well as holidays, to around 2.6m customers.

But its 180,000 retail investors have suffered a gloomy run since it floated for £2.1bn five years ago, with shares plunging 75pc. After hitting a high of 227.4p in 2016, its stock was 31.8p last month. It rose 13.7pc, or 5.88p, to 48.78p yesterday.

Saga is currently looking for a new chief executive after Lance Batchelor announced his departure last month.

The 55- year- old tried to rebrand the firm to focus on selling a wider range of products to its loyal customers.

Saga has seen a series of senior level departures in the past two years, including those of its chief financial officer and chairman. But the stock has taken a battering this year after bosses issued a profit warning and raised concerns about its £391m debt pile.

Saga said: ‘We have good and open relations with all shareholders and expect to be in contact with elliott shortly.’

In April, Saga said bookings had been hurt by customers cutting back on travel because of uncertainty over Britain’s exit from the european Union. The turmoil could see profits plunge £75m this year.

elliott declined to comment.