(TDB) - US-based hedge fund Elliott Management has taken a stake “in excess of 2.5%” in Pernod Ricard, noting in a statement that the French drinks group has “significant potential for improvement”.

In a statement released today (12 December), Elliott Management stated that Pernod Ricard had lost market share “across key segments within its portfolio”. It added that operating margins were at “a five-percentage point discount” compared to rival drinks corporation, Diageo.

The hedge fund also noted that Pernod Ricard’s track record in merger and acquisitions had been “disappointing,” with its record €6 billion acquisition of the Vin & Sprit Group, the former owner of Absolut Vodka, from the Swedish government in 2008, “falling short of expectations”.

As a result, Elliott stated, total shareholder return had underperformed in comparison to most of its competitors with Pernod Ricard “notably ranking last among its peer set over the last decade”. The US company blamed Pernod Ricard’s underperformance on “inadequate corporate governance” and the “lack of outside perspectives”.