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* Cevian seeks 500 mln stg in cost cuts
* Stake build-up over several months-sources
* Shares rise 3.5%
(Updates shares)
By Carolyn Cohn
LONDON, June 8 (Reuters) - Activist investor Cevian Capital
said Aviva should return 5 billion pounds ($7.08 billion) of
excess capital in 2022 after revealing it has built up a near 5%
stake in the British insurer, putting new CEO Amanda Blanc under
pressure to accelerate changes.
Aviva, which has sold eight businesses since the appointment
of Blanc as CEO in July 2020, said last month it had raised 7.5
billion pounds from disposals and planned to return money to
shareholders, without putting a figure on it.
"Aviva has been poorly managed for many years, and its
high-quality core businesses have been held back by high costs
and a series of bad strategic decisions," Christer Gardell,
managing partner and co-founder of Cevian said in a statement.
Analysts have said the insurer would have between 3.7
billion and 6.6 billion pounds of excess capital following the
completion of the asset sales.
Aviva should have a value of more than 8 pounds per share
within three years, and more than double its dividend to 45
pence, Cevian said.
Aviva's shares are currently trading above 4 pounds a share
and rose 3.5% on the Cevian statement.
Cevian also said it saw scope for further cost-cutting,
totalling at least 500 million pounds by 2023. Aviva outlined a
strategy last year including 300 million pounds in cost cuts by
2022.
Aviva is shifting focus to the key markets of Britain,
Canada and Ireland since the asset sales.
Industry sources have speculated the insurer could make
further changes such as selling books of life insurance business
closed to new customers. The Canadian unit might also attract
buyers, they said.
"Aviva has made significant strategic progress over the past
11 months and we remain sharply focused on further improving our
performance," an Aviva spokesperson said in an emailed
statement.
"We regularly engage with investors and welcome any thoughts
which move us towards our goal of delivering long term
shareholder value."
Cevian bought a stake in rival insurer RSA in 2013 which it
built up to 15%, culminating in the completion last week of
RSA's sale to Denmark's Tryg and Canada's Intact
Financial.
Cevian started building up the stake in Aviva several months
ago, with relations cordial between the investor and Aviva's
management, according to two sources familiar with the matter.
Chairman George Culmer and CEO Blanc are "committed
to...delivering substantial shareholder value", Cevian said in
the statement.
($1 = 0.7063 pounds)
(Reporting by Carolyn Cohn; editing by Rachel Armstrong and
Jason Neel)
