ALEX BRUMMER: Aviva must get itself onto a war footing to keep the vultures at bay 

ALEX BRUMMER: Aviva must get itself onto a war footing to keep the vultures at bay

Arguably, if UK long investors did a better job of nudging FTSE 100 companies into action, vulture activist investors such as Cevian and Elliott Advisers would not be afforded the space in which to operate.

Cevian is seeking to dictate the future cost structure and payout strategy at Aviva, when newish chief executive Amanda Blanc has done considerably more than her many predecessors to define the future.

Rather than poke the bear, she is choosing to engage with Cevian which has picked up a 5 per cent stake valued at £800million. 

Cevian is seeking to dictate the future cost structure and pay-out strategy at Aviva, when newish chief exec Amanda Blanc has done far more than her predecessors to define the future

That may be the civilised approach to ‘greenmail’ but in the case of Cevian, it could prove toxic.

The recent break-up and sale overseas of Britain’s biggest general insurer, the 300-year-old RSA, was triggered after Cevian took a stake.

Cevian, headed by ‘the Butcher’ Christer Gardell, may seem terribly reasonable but that’s not what former executives at German steel and industrial giant Thyssenkrupp have been saying.

They have accused activist investors, which include Cevian, of waging ‘psycho-terror’ by placing ‘lies in public’. 

One trusts that Blanc and the Aviva board headed by George Culmer, veteran of Lloyds Bank and RSA, are not taking Cevian at face value. Aviva must follow Emma Walmsley at pharma firm Glaxosmithkline and place the insurance giant on a war footing.

Since taking the helm, Blanc has moved rapidly to simplify the group and is focusing on three key markets: Britain, Canada and Ireland. 

Blanc has sold eight offshoots, raised £7.5billion in cash, paid down £1.9billion of debt and pledged to redistribute proceeds to shareholders in her year in charge.

That is not as simple as Cevian would have anyone believe. Several of the transactions, including the £2.8billion sale of its French arm, have yet to complete. 

Selling insurance assets and distributing capital is not like selling chip shops and offering the customers a free bag. 

There are regulators to be satisfied on both sides of the Channel and City enforcers need to make sure that Aviva has a risk-free capital cushion as the UK emerges from Covid.

Aviva itself doesn’t have a great record of defending British firms. It supported activist Edward Bramson when he sought to unseat Jes Staley at Barclays, led the assault on the Deliveroo float and sided with Elliott when it took aim at Walmsley. So it may find itself short of friends.

Cevian is demanding a big share buyback, an uplift in the dividend to 45p a share and at least £500million of cost cuts by 2023. It is outjumping Blanc’s promise of £300million of savings. 

It is easy to demand people in Britain be sacked from a designer Swedish armchair in the hope of supercharged profits.

It appears too much of a coincidence that activists take aim at women FTSE 100 bosses such as Blanc and Walmsley. 

The reasons may be rooted in history, in that after boards exhaust male succession candidates, they turn to talented women. But it is a terrible look for Cevian and Elliott.

Power cut

There can be no surprise that EDF has decided to pull the plug on the Dungeness B power station which has been supplying the nation since it opened in 1966.

Like much of the UK’s EDF-owned nuclear fleet, Dungeness, in Kent, is well past its sell-by date. The GMB union is ‘stunned’ by the closure and rightly worried about the job security of the workers.

It need not be too concerned, given that decommissioning can be a life’s work. The EDF decision focuses attention on delays in getting finance together for a super-station at Sizewell as well as advancing work on Rolls-Royce’s small modular reactors ahead of Cop-26 later this year.

Publicly-quoted Drax often gets it in the neck for importing wood pellets from North America as replacement fuel for coal. 

But it deserves credit for combining with Japan’s Mitsubishi to develop Europe’s biggest carbon capture project with negative emissions. If only Whitehall was so fleet of foot.

Fashion faux pas

Nigel Farage can breathe easily again.

The former commodities trader was outraged when the Hong Kong-owned London Metal Exchange called a halt to one of the last open outcry markets in the City and decided to go electronic.

That has now been rescinded and the screaming dealers in colourful jackets will return. Phew!