Kerry shares slide as ‘short seller’ questions M&A record

Stock down as much as 11.5% before partly recovering

Analysts in US investment bank Jefferies  rushed to the defence of Kerry.

Analysts in US investment bank Jefferies rushed to the defence of Kerry.


Shares in Kerry Group slid as much as 11.5 per cent on Thursday as a firm claimed it that was “short selling” the stock and issued a report online that questioned the company’s acquisitions track record.

The little-known Ontake Research claimed in a 30-page report that Kerry Group had overpaid for low-yielding assets in the past, prompting a response from a spokesman from the Irish group that the thesis “is full of errors, inaccuracies and incorrect deductions”.

By the close of trading in Europe, the web page of Ontake Research had been taken down. The report did not name the authors or contain contact details.

Analysts in US investment bank Jefferies also rushed to the defence of Kerry, saying that the Ontake piece echoed comments in a June 2019 report from another activist firm that was betting against the stock, called Shadowfall Capital.

“Kerry’s acquisition strategy has been stable for a number of years and we think is well appreciated by the market; they invest amounts roughly equal to their free cash flow into multiple smaller assets, with the primary focus being to acquire competencies or capabilities that are complementary to Kerry’s solutions-based model,” Jefferies said.

“This often means acquiring companies with promising technologies, but with little to no profit. The fact that Kerry are able to implement these technologies/competencies (albeit with some level of integration spend) and continue to grow volumes and margins organically, is testament to their model.”


Jefferies concluded: “Ultimately, if accusations of overpaying for non-performing assets were true, it would be to the detriment of group return on capital, which the report does not mention once.”

Shares in Kerry rallied off their lows in afternoon trading in Dublin to close 4.7 per cent lower at €108.

Short selling involves borrowing shares from investors in a company and selling them on the market. The hope is that the shares fall before the fund buys them back on the market, returns them to the original shareholder and pockets most of the difference as profit.