Activist investor Kelso takes stake in ‘undervalued’ retailer The Works
Activist investor Kelso has snapped up a stake in arts and crafts retailer The Works today and said it will look to “restore the intrinsic valuation of the firm” after a slump in its share price over the past five years.
In a statement this morning, the listed investment firm said it purchased a 3.2 per cent stake in The Works at an average price of 31.3p.
The move marks Kelso’s second investment since listing on the main market last year with the intention of investing in listed firms it believes are undervalued. Its first investment last year was THG, the maker of MyProtein and owner of Morning Wire
In a statement this morning, Kelso said it believed the strategy and proposition was “strong” and the firm had a “clear purpose of inspiring people to read, learn, create and play”.
“Kelso believes strongly in the strategy and product range of The Works. Arts and craft, puzzles, games and books have an important place in life especially when focussed at the value end of the product spectrum,” the firm said.
“We are very excited about our new investment and helping restore the intrinsic valuation of The Works which we believe is significantly higher than the current price.”
The Works was set up in 1981 and operates 525 stores across the UK and Ireland. The retailer debuted on London’s markets in 2018 at a valuation of £100m but its value has cratered since then, closing at a value of around £22.8m on Friday.
Kelso said today it backed the current board of the firm and would vote in favour of the majority of resolutions at its annual meeting next week, other than a recommendation for a dividend. Bosses at Kelso said cash would be better put to use buying back shares.
Shares in The Works jumped 9.5 per cent in early trading today.