Hedge fund Sachem Head Capital Management has built a US$1.2 billion stake in Elanco Animal Health Inc and plans to push for changes at the company that makes medicines and vaccinations for pets and livestock, a person familiar with the matter said on Wednesday.
FILE PHOTO: Scott Ferguson, Managing Partner and Portfolio Manager for Sachem Head Capital Management LP, presents during the 2018 Sohn Investment Conference in New York City, U.S., April 23, 2018. REUTERS/Brendan McDermidBOSTON: Hedge fund Sachem Head Capital Management has built a US$1.2 billion stake in Elanco Animal Health Inc and plans to push for changes at the company that makes medicines and vaccinations for pets and livestock, a person familiar with the matter said on Wednesday.
The investment, first reported by Bloomberg, translates into a stake of 9.1per cent in Elanco which is valued at US$14 billion.Elanco's stock price climbed as much as 9per cent on news that Sachem Head, run by Scott Ferguson, plans engage with management to push for improvements. Ferguson raised cash for the position through a so-called special purpose vehicle over the last months and has experience in investing in animal health after making a bet on Zoetis in 2014.
Elanco and Zoetis are competitors but Elanco has lagged with its shares up only 5.4per cent from a year ago, while Zoetis' stock has climbed 27per cent during the same time.