* SNC-Lavalin says it's aware West Face is a shareholder
* West Face's stake is less than 10 pct, SNC says
* SNC embroiled in corruption scandal
Feb 7 Canada's West Face Capital, an activist
fund that successfully pressured for a shake-up at Maple Leaf
Foods in 2010, has acquired a minority stake in SNC-Lavalin
Group Inc, the scandal-plagued Canadian engineering and
Shares of the Montreal-based company, whose former chief
executive is facing fraud charges, rose 2.5 percent after a
newspaper reported that West Face had taken the stake.
SNC spokeswoman Leslie Quinton later said SNC has been aware
since last autumn that West Face had become a shareholder.
"The size of their stake is under 10 percent because that is
the threshold where its disclosed publicly, so we don't know the
precise size," she said in an email.
West Face could not immediately be reached for comment but
The Globe and Mail newspaper said on its website that West Face
had described its SNC stake as "meaningful."
Quoting a private letter from West Face that the newspaper
had obtained, the paper said the fund had accumulated the stake
because it believed that investors had over-reacted to negative
news about SNC and had ignored the intrinsic value of the stock,
which it pegged at between C$50 and C$75 a share.
SNC shares closed at C$47.49 on Thursday, up nearly 2.5
percent. The stock has made up some lost ground this year after
losing more than 20 percent of its value in 2012, weighed down
by an ethics scandal at the 101-year-old company.
SNC's former CEO quit in March of last year and was
subsequently arrested in November on charges of fraud and the
use of false documents.
Police are also investigating allegations of corruption and
money laundering against other former company officials.
The West Face letter also revealed that the fund recently
acquired minority stakes in U.S. grocery chain Safeway Inc
and Talisman Energy Inc, the Globe said.
In 2010, West Face targeted Maple Leaf Foods, one
of Canada's biggest food companies, for a shakeup by becoming
its second-biggest shareholder.
West Face was pushing for a smaller Maple Leaf board, for
steps to ensure most directors were independent and for
shareholders to regularly review the company's approach to
Maple Leaf headed off a showdown by appointing West Face
chief executive Greg Boland to its board in February 2011.
West Face still owns 11.4 percent of Maple Leaf.