Key Takeaways
Montreal-based investment firm Converium Capital is pressuring CVS Group Plc’s board to authorize a £100 million ($135.4 million) share buyback, citing deep undervaluation after a prolonged stock slide.
"Repurchasing the company’s materially undervalued stock today is the highest-return use of capital available to the Board," Michael Rapps, Managing Partner at Converium Capital, said in a letter to the board. "Acting decisively would re-engage investors who have grown skeptical of the Board's stewardship of shareholder capital."
The activist’s demand follows a 20% drop in the veterinary group’s share price since the UK’s Competition and Markets Authority issued a provisional decision on the industry on Oct. 15, 2025. The stock’s three and five-year returns are both negative 49%, leaving it at a price level not seen since 2017, when its revenue and profit were less than half of current levels. Between October 2025 and January 2026, CVS repurchased £20 million of stock at an average price 13% higher than the current price.
Converium, which holds a stake of approximately 2%, argues the market is valuing CVS Group like a small clinic rather than a multinational operator of nearly 500 locations. The firm stated that at a valuation of roughly eight times estimated fiscal year EBITDA, the company trades at a steep discount to private market transactions.
The investment firm contends that CVS Group can easily fund the repurchase program using available debt and free cash flow. The company’s leverage of less than 1.4 times EBITDA is well below its own conservative 2.0x target. Converium also noted that a £100 million buyback would not impede the company’s acquisition strategy, estimating that CVS could still allocate £45 million toward clinic purchases, an amount greater than its spending in each of the last two fiscal years.
The pressure from Converium signals a potential escalation if the board does not act on its demands, with the fund warning it could seek board representation. The move is the latest example of shareholder activism in the UK market, where undervalued companies have become frequent targets for investors seeking to force changes to unlock value.
This article is for informational purposes only and does not constitute investment advice.
