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Activist investor sees Diebold Nixdorf shares doubling with new CEO

Stock MarketsMar 13, 2018 05:40PM ET
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© Reuters. Activist investor sees Diebold Nixdorf shares doubling with new CEO

By Svea Herbst-Bayliss

BOSTON (Reuters) - Activist investor Alexander Roepers recently boosted his firm's stake in Diebold Nixdorf Inc and said the share price could double within 18 months now that there is a new chief executive at the helm of the automatic teller machine maker.

Roepers' $1.2 billion Atlantic Investment Management owns 6.1 million shares, or 8 percent, of the North Canton, Ohio-based company, after buying more stock in February when Diebold traded near $15 a share, a recent regulatory filing shows.

Atlantic first invested in Diebold Nixdorf in late 2016, after the U.S. company acquired Germany's Wincor Nixdorf. It bought a 5.1 percent stake when the stock was trading closer to $23, an earlier filing shows.

After watching his investment dip last year, Roepers, whose taste runs to old-economy companies and working with management behind the scenes instead of making splashy public demands, now expects to see gains.

"The newly combined company is now set up for success," said the Dutch-born investor, who launched Atlantic in 1988 almost 20 years after the first ATM was installed. He said the share price could increase by 50 percent to 100 percent within 18 months from its current level of around $17. The stock closed at $17.45 on Tuesday.

One reason for optimism may be Gerrard Schmid, who was named chief executive in February. He replaced Andreas Mattes, who exited late last year after running the company since 2013. "There is a new CEO and we are supportive of him," Roepers said.

Mattes oversaw the $1.8 billion takeover of Wincor Nixdorf in 2016, but Diebold Nixdorf reported a loss in the third quarter last year. Its stock price fell from $34.64 in December 2014 to $16.35 in December 2017.

New U.S. tax cuts turning into windfalls for banks and some of the funds are being earmarked for capital investments, which could help Diebold. JPMorgan Chase & Co (NYSE:JPM), for example, said in January that it plans to open 400 new U.S. branches, citing both tax breaks and an improved business climate for the expansion.

"When they open the new branches they won't be putting in old ATMs," Roepers said.

Also, older ATMs are being upgraded to appeal to customers, including millennials, who like the new machines' sleeker look and their ability to dispense more cash at one time.

Atlantic's Cambrian Fund Ltd returned 14.12 percent last year and the Cambrian Global Fund gained 17 percent. The funds have returned an average 16 percent and 12 percent a year over their lifetimes and the Cambrian Global Fund is up 5 percent this year.

Activist investor sees Diebold Nixdorf shares doubling with new CEO
 

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