May 2, 2019 / 9:11 AM / in 23 days

UPDATE 1-Activist fund Cevian trims Ericsson stake, shares drop

* Cevian trims stake by 22 mln Ericsson shares

* Cevian now holds 281 mln B-shares, 339,000 A-shares

* Cevian says move unrelated to view of Ericsson’s potential

* Ericsson shares down 2.9 pct (Adds more comments from Cevian, context, background, shares)

STOCKHOLM, May 2 (Reuters) - Activist fund firm Cevian Capital, Ericsson’s largest owner, said on Thursday it had made “a minor adjustment” in its holding in the mobile network gear maker, selling 22 million B-shares in recent months.

A filing with the U.S. Securities & Exchange Commission showed Cevian, Europe’s largest activist fund investor, had trimmed its holding in mobile networks maker Ericsson to just under 281 million B-shares and 339,228 A-shares.

“We have made a minor adjustment of our holding due to the stock becoming such a large part of our portfolio,” Cevian Managing Partner Christer Gardell told Reuters in a text message.

“It has nothing to do with our view of the potential of the Ericsson stock. On the contrary, we have continuously written up the potential as the company has delivered and the market has strengthened,” he added.

Cevian’s holding now corresponds to 8.4 percent of the share capital in Ericsson and 4.99 percent of the votes. Ericsson’s shares were under some pressure on Thursday following the news, falling 2.9 percent by 0829 GMT.

The share price is, however, up nearly 40 percent over the past 12 months, boosted by progress from an ongoing restructuring programme, a strengthening telecom equipment market, as well as widespread 5G network security concerns seen impacting its main Chinese rivals such as Huawei.

“We continue to be Ericsson’s largest owner with around 25 billion crowns ($2.62 billion) invested in the company,” Gardell said.

On April 17 Ericsson posted a forecast-beating quarterly operating profit helped by strong growth in North America and cost cuts. ($1 = 9.5252 Swedish crowns) (Reporting by Johannes Hellstrom; editing by Niklas Pollard and Emelia Sithole-Matarise)

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