CORRECT: Activist pressures CVS to buy back GBP100 million in shares

Wed, 13th May 2026 12:51

(Removing reference to Converium calling for a board reshuffle)

(Alliance News) - CVS Group PLC has received calls from an activist investor to implement share buybacks, in the wake of an industry pricing probe.

Montreal-based Converium Capital Inc manages funds which own around 2% of CVS, a Norfolk, England-based provider of veterinary services.

Converium's Managing Partner Michael Rapps addressed a letter to CVS calling on the company to address its share price discount with an immediate buyback programme. The investor has said CVS should repurchase shares worth GBP100 million, representing 12.5% of the company's current market capitalisation.

"Based on discussions with shareholders, Converium believes there is clear and broad support for this action," Converium said.

Sources familiar with the matter told the Financial Times that Converium has threatened to rally shareholders to nominate new directors to the CVS board, should the company ignore its request for buybacks.

"Repurchasing the company’s materially undervalued stock today is the highest-return use of capital available to the board. Acting decisively would re-engage investors who have grown sceptical of the board's stewardship of shareholder capital," the activist-investor continued in its letter to CVS.

"Although you indicated that a buyback would be considered, the board’s inaction in this matter is no longer tenable," Converium added.

CVS shares fell 0.7% to 1,133.00 pence on Wednesday afternoon in London, and are down 10% over the past year.

Converium sees this reflecting a loss in confidence from investors, following a regulatory probe into the veterinary sector.

CVS on Tuesday had traded as low as 1,107.00p, which is down 20% from 1,390.00p on October 15, when the UK Competition & Markets Authority published a provisional ruling. The watchdog in March concluded an investigation which ruled that vet practices must publish price lists and cap prescription fees. It had launched the review back in 2023, finding that vet prices had risen at twice the rate of inflation.

London listings CVS and Pets at Home Group PLC, alongside Linnaeus Veterinary Ltd, which is owned by Mars Inc, were both included in the CMA's probe, as were three private-equity backed firms, Independent Vetcare Ltd, VetPartners Group Ltd and Medivet Group Holdings Ltd.

"Whilst we continue to believe that some of these remedies are not fully justified, we are comfortable with them and believe they are workable," CVS had said in response to the review.

Converium called the share price decline since last October "striking, given the constraints the company operated under during the investigation: heightened scrutiny of corporate-owned vet clinics, sensitivity around service price increases, and an effective moratorium on UK acquisitions".

The activist went on to say that the CMA probe's "benign outcome" and CVS's uplisting to the FTSE250 mid-cap index were not the "catalysts for re-rating" Converium had expected.

"CVS Group’s shares now trade at the same price as they did in 2017, when the company had less than half its current revenue, Ebitde, and net income," Converium continued.

CVS shares were quoted at 1,450.00p in September 2017.

Converium stressed buybacks would not prevent CVS from spending up to GBP45 million on acquisitions, whilst remaining within its leverage target.

"It is critical to reduce the disconnect between CVS Group's public valuation and the prices that acquirors have paid for comparable businesses – a gap that, left unaddressed, is likely to invite outside interest in the company...We are continuing our dialogue with other shareholders in the meantime," Converium concluded.

Back in 2022, Converium targeted Foxtons Group PLC, writing to the real estate agent and requesting that Foxtons enter a formal sale process.

Converium's letter to CVS follows an announcement in March that CVS Chief Executive Richard Fairman would be stepping down "for personal reasons".

By Holly Munks, Alliance News reporter

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