Activist investor Standard Investments halves stake in Johnson Matthey after major overhaul

• Activist investor Standard Investments has halved its stake in London-listed Johnson Matthey after a six-month campaign to overhaul the company.
• Based in New York, Standard Investments is the investment arm of Standard Industries, a privately held industrial company that owns the specialty chemicals company W.R. Grace.
• Standard began agitating late last year by publishing an open letter accusing Johnson Matthey's board of presiding over “sustained underperformance” that had wiped out shareholder value.

Activist investor Standard Investments has halved its stake in London-listed Johnson Matthey after a six-month campaign that forced the British specialty chemicals company into a major overhaul.

Standard's total holding fell to 4.75% from a previously disclosed 9.52%, regulatory filings showed. The investment firm has sold into a share price rally that has recovered to over £18 ($24.50), up more than 35% from a low of around £13.52 when its public pressure campaign began in December 2024.

Standard Investments' remaining position consists of a 1.77% holding in direct shares and nearly 3% held through cash-settled equity swaps, the filing showed.

Based in New York, Standard Investments is the investment arm of Standard Industries, a privately held industrial company. The firm derives its credibility in the chemicals sector from its $7 billion takeover of specialty chemicals company W.R. Grace, which it acquired in 2021, part financed by private equity firm Apollo.

Standard began agitating late last year, when at the time it was Johnson Matthey's largest shareholder with an 11% stake. The firm's co-CEOs, David Millstone and David Winter, published an open letter accusing the board of presiding over “sustained underperformance” that had wiped out shareholder value. They highlighted that investors had lost 53% during the Johnson Matthey chairman's six-year tenure.

The pressure prompted Johnson Matthey to directly address two of the activists' demands in January, announcing it would form a new board investment committee to oversee “investment strategies and capital allocation” and would cease investing in its Hydrogen Technologies business.

A board overhaul followed in February, with chair Patrick Thomas, who was singled out for criticism by the Standard, set to leave in July.

In May, the British company announced it had agreed to sell its catalyst technologies business to Honeywell for £1.8 billion. The company said the deal would create a “highly streamlined group” and would return £1.4 billion of the proceeds to shareholders.

Investors welcomed the deal, with shares surging 30% after the announcement. Analysts praised the move, calling it a “surprise value unlock.”

“For management who has been under pressure from activists since late 2024, this marks a potential turning point demonstrating strong execution,” Tristan Lamotte, equity analyst at Deutsche Bank, said at the time.

The sale price was far above market expectations and prompted analysts at JPMorgan and Berenberg to raise their price targets.

“The decision to divest for a multiple higher than the group may not only benefit JMAT's valuation directly, but it also removes the narrative dissonance caused by growth-oriented and cash-cow businesses being housed in the same company,” said Berenberg's Sebastian Bray in a note to clients on May 28.

Standard Investments declined to comment. Johnson Matthey did not immediately respond to CNBC's query.