Standard Investments calls for strategic review of Johnson Matthey

Standard Investments, which holds an 11% stake in Johnson Matthey, wrote an open letter to chairman Patrick Thomas on Monday, in which it also suggested a major overhaul of its board and the de-risking or disposal of its lossmaking Hydrogen Technologies arm.

The FTSE 250-listed group was said to have been "complacent and incapable of correcting a misguided strategy" that has delivered "sustained underperformance".

While Standard Investments said it still believes in the "unique value of Johnson Matthey", it warned that the board lacked a "sense of urgency" and warned that a "massive credibility gap" had emerged with both investors and the wider market.

AJ Bell's Russ Mould said: "The largest investor in chemicals group Johnson Matthey is calling for a strategic review of the business which could include its sale. Standard Investments' criticisms are lent credibility by the poor performance of the share price and weak and inconsistent earnings over several years.

"The investor accuses Johnson Matthey of complacency – citing weak performance under the six- and two-and-a-bit-year tenures of the chair and CEO, respectively. The market seems to welcome Standard Investments' intervention and that may hint at the potential for success in its efforts to secure new voices on the board and radically shake-up the business."

As of 0925 GMT, Johnson Matthey shares were up 4.96% at 1,419.0p.

Reporting by Iain Gilbert at Sharecast.com