Now vultures get their claws into medical pioneer

Hedge funds target Smith & Nephew as fears grow new boss will break up firm

A NEW boss with a reputation for deal-making will run Smith & Nephew (S&N) after it was targeted by a ruthless hedge fund which wants to break up the business.

Namal Nawana is set to take over on May 7 from chief executive Olivier Bohuon, who will step down after seven years at the top of the hospital equipment company.

The 47- year- old’s appointment comes as S&N is being pressured by Elliott Management to sell parts of the company and increase shareholder value. Elliott, which is part of the empire run by feared Wall Street operator Paul Singer, is thought to have amassed a stake that is worth more than 2pc, which would make it a top seven shareholder.

It is known for using bare-knuckle tactics to force changes at companies and once famously had an Argentinian naval ship seized over lapsed government debt payments.

S&N refused to say whether Elliott’s emergence as a shareholder had affected its choice of chief executive.

But it pointed to Nawana’s role in the turnaround and sale of US medical technology firm Alere for £3.6bn last year.

‘In Namal, we have secured an exceptional new chief executive with a proven record within the medical device industry,’ chairman Roberto Quarta said yesterday.

‘He has the experience as a CEO of a major listed company in the healthcare sector, and has demonstrated that he can energise businesses to deliver better performance and greater value to shareholders.’ Nawana said that he was excited to ‘drive the business forward into its next exciting chapter’.

Bohuon’s departure was announced last October after he was the subject of criticism from shareholders over his pay and the company’s performance.

It emerged Elliott Management had been amassing a stake in S&N and was pushing to break up the business.

The campaign is reportedly being masterminded by the fund’s European arm, Elliott Advisors. Singer’s son, Gordon, 44, runs the division, which is based in London.

The former president of Argentina, Cristina Fernandez de Kirchner, once described the elder Singer as ‘The Vulture Lord’ and a ‘bloodsucker’.

Russ Mould, investment director at AJ Bell, said pressure from Elliott was likely to focus the minds of bosses at S&N.

He said: ‘They are extremely tenacious people and their reputation precedes them.

‘They are not going to go away without a fight and I am sure they have done their homework.’

S&N was founded more than 160 years ago in Hull and is now internationally renowned for its hip and knee implants, and has a big presence in other areas of healthcare as well, employing 15,000 people overall.

The company has a dual listing in London and New York and was yesterday worth about £11.5bn.

Over the years it has been the subject of continuous takeover speculation. A spokesman for S&N said yesterday: ‘Smith & Nephew doesn’t comment on who our shareholders are.’

Elliott declined to comment.