* Shares up 8 percent
* Review targets demerging engineered ceramics from
* Largest shareholder Cevian's (20 pct) Gardell to become
By Brenton Cordeiro
May 17 Cookson Group Plc may break up
into its two major divisions in an effort to improve shareholder
returns and is to admit a partner from activist shareholder
Cevian to its board, the British industrial materials supplier
said on Thursday.
Christer Gardell, managing partner of Sweden-based Cevian
Capital, which owns about a fifth of Cookson shares and has been
building its stake since last year, will join its board as a
non-executive director, Cookson said.
The review will look into a potential demerger of its two
main divisions - engineered ceramics and performance materials
-- and comes a few months after it sold its loss-making U.S.
precious metals unit.
Talk of a Cookson demerger has circulated over the last few
months as Cevian began building its stake in the company.
The engineered ceramics division, whose products are used in
the glass and solar industries as well as by steelmakers and
foundries, brought in revenue of 1.69 billion pounds last year.
The performance materials division, about half that size in
revenue, supplies materials and chemicals to the electronics,
automotive, industrial and construction markets.
Analysts welcomed the plan and the company's shares stood
8.8 percent higher at 643 pence at 0735 GMT.
"Management believes that following the substantial
improvement at performance materials, the divisions can
potentially be separated, which should drive further focus and
performance," Alex Toms of BofA Merrill Lynch said.
Cookson said a separation of the two businesses may cost
between 50 million pounds ($79.59 million) and 70 million
Trading for the first four months met the company's
expectations. Trading profit rose slightly, despite continuing
losses in its fused silica business, Cookson said in a trading
statement accompanying the announcements.