Persson and Reinfeldt worried over Volvo
TT/The Local · 7 Sep 2006, 19:30
Published: 07 Sep 2006 19:30 GMT+02:00
Financier Christer Gardell has through his fund Cevian Capital along with British Parvus Asset Management bought 8 million A-shares at Volvo.
Gardell, head of Cevian, wants Vovlo to payout some 19 billion kronor to stock owners and sell certain pieces of the company.
“The reason we have invested in Vovlo is that we think the company is fundamentally undervalued,” said Gardell, adding that the investment is longterm.
Cevian, on Wednesday, messaged that the company now controlled the equivalent of 5 percent of the votes at Volvo. The investment company Öresund, which owns 1 percent of the votes at Volvo, supports Cevian.
The government is critical of the fact that the state AP Pension Funds are among the backers of Cevian.
Göran Persson said he wanted Volvo to have owners with a long-term vision for the company.
"I look on Volvo as a long-term creator of both growth and jobs. It would naturally be good if the Swedish pension funds also took such long-term responsibility," he said.
He questioned " the way venture capitalists break up companies."
"Who is this Cevian? We see a person called Gardell, but all the other capital that lies behind it, what interests does it represent, what long-term construction is there."
Moderate Party leader Fredrik Reinfeldt said he agreed in principle, but said that Social Democratic policy had help create the current situation.
"During the post-war period a kind of politics has been followed that has wished away the owner families who were prepared to take long-term responsibility. That is the price we pay when we now get more short-term capital interest and institutional ownership," he said.
Volvo, which makes commercial vehicles, employs 81,000 people worldwide, and is one of Sweden's largest employers. The carmaker of the same name was bought by Ford in 1998.