Activist investor Cevian ups stake in Baloise to 9.4%

ZURICH (Reuters) -Activist investor Cevian Capital has increased its stake in Baloise Holding, it said on Monday, increasing its ability to force changes at the Swiss insurer.

Cevian now holds around 9.4% in Baloise, the biggest investor in the company.

The investment is an increase from the 3.12% stake held by Cevian in Baloise revealed earlier this year. According to Swiss stock market disclosures, the stake was increased to 5.11% by June.

"Baloise has the opportunity to become a top-performing Swiss insurer," said Robert Schuchna, a partner at Cevian. "We believe there is significant value potential in the company."

Cevian, which has offices in Stockholm, London and near Zurich, previously invested in Swiss engineering group ABB and last year reported a position in UBS, saying it wanted to double the value of its stake.

It has so far not revealed its plans for Baloise.

The investor is pressing for a strategic overhaul of the company, said The Financial Times, which first reported the increased stake.

Cevian wants Baloise's management to refocus the group on countries where it is strongest and has a high market share, and direct more of its cash generation to shareholder returns and investing in its domestic market, the newspaper said, citing people familiar with its thinking.

The increased stake comes after Baloise shareholders voted in April to scrap a 2% cap on voting rights, which had previously limited their influence on the company's management.

Baloise has endured a tough few years, with the Basel company's share price trailing rival insurers while investors have raised concerns the performance of its businesses outside its Swiss home market.

Over the last two years, the company's stock has struggled, underperforming its insurance peers by nearly 15%.

"We are looking forward to September 12, when we will explain Baloise's strategic direction at our investor update," a Baloise spokesman said.

The company is due to publish its half-year results and give an investor update on that day, where it is expected to unveil new mid-term targets.

(Reporting by Oliver Hirt and John Revill, additional reporting by Gnaneshwar Rajan in Bengaluru;; editing by Diane Craft and Kim Coghill)