THE activist investor which sparked a major shake-up at Dundee-based Alliance Trust has launched a campaign to improve the performance of Scotch whisky giant Pernod Ricard after gradually building up a stake in the distiller.

Elliott Advisors, which exited the shareholding it had built in Alliance last year after the investment house overhauled its fund management strategy, now has a 2.5 per cent shareholding in the French drinks giant, owner of the Chivas Brothers whisky

business. And the London operation of New York hedge fund revealed in a statement that it has met Pernod chief executive Alexandre Ricard and written to the board of the Paris-listed company to “share its analysis and views on value creation”.

The move by Elliott, which has

$35 billion of funds under management, sent shares in Paris-listed Pernod soaring by 4.6 per cent, closing at €148.8.

It comes amid speculation that Pernod Ricard is not performing as well as it should in the key areas of gin, vodka and parts of its whisky portfolio, notably compared with fierce rival Diageo. The loss of market share and write-downs on Absolut vodka, which Pernod Ricard acquired 10 years ago, is also understood to be concerning shareholders.

Elliott Advisors (UK) said in a statement that Pernod Ricard “offers one of the most attractive investment opportunities in the industry, with significant potential for improvement.”

But it declared: “Despite the favourable economic backdrop for the spirits industry over the last, the company has lost market share across key segments within its portfolio, and underperformed its peers on several metrics.

“Successive operational improvement plans have failed to generate operating

leverage, leaving operating margins at a five-percentage point discount to its closest peer Diageo.

“Pernod’s M&A track record has also been disappointing, with the €6 billion acquisition of Absolut in 2008 falling short of expectations. The result has been a material total shareholder return underperformance relative to its most comparable peers, with the company notably ranking last among its peer set over the last decade.”

Elliott went on to suggest the perceived underperformance could be linked to “inadequate corporate governance and a lack of outside perspectives” at the firm, whose modern-day incarnation was formed in 1975 through the merger of two French anise-based spirit companies, Pernod and Ricard. Pernod was originally founded in 1805

while Ricard was established by Paul Ricard in 1932.

The activist said: “Elliott believes operational and governance improvements would allow Pernod to unlock much of the value that the company is capable of delivering, improving the strength and sustainability of the company for all shareholders.”

The intervention by Elliott comes after Pernod reported in October a 10.4% increase in organic sales to €2.4 billion in its first quarter, while warning sales growth would slow as the year progressed. Mr Ricard said then that the company had been making contingency plans for a no-deal Brexit. That was followed last week by quotes attributed to the head of Chivas Brothers, Jean-Christophe Coutures, urging the Scottish Government get behind Prime Minister Theresa May’s Brexit Withdrawal Agreement.