Activist investor Engine Capital has built a roughly 2% stake in KBR and is urging the engineering contractor to explore a sale, the Wall Street Journal reported on Wednesday, citing a letter from a senior executive.
In the letter, Engine’s founder and portfolio manager Arnaud Ajdler said KBR’s businesses were undervalued in the public market. He argued that the company’s planned separation would be create new risks and tax difficulties, the WSJ reported.
Reuters could not immediately verify the letter or the WSJ report.
Last year, KBR launched a process to spin off its Mission Technology Solutions segment, which serves military and other government agencies. The separation is expected to be completed by mid- to late-2026.
Following the divestment, the engineering contractor plans to continue operating its Sustainable Technology Solutions business, which focuses on energy transition and emissions reduction.
Ajdler’s letter, delivered to KBR’s board on Monday, said the Houston-based company could attract both private equity and strategic buyers and command between $48 and $55 per share in a sale.
KBR shares closed at $36.02 on Wednesday, and the $4.57-billion-company’s stock is down more than 10% so far this year.
“A full-company sale would offer shareholders a clear and immediate realization of value,” Ajdler wrote in the letter, which was seen by the WSJ.
He added that such a transaction would reduce execution risk, eliminate additional standalone costs and allow a buyer to optimize the business under its own management and operating structure.
Engine Capital and KBR did not immediately respond to a Reuters’ request for comment.
KBR has previously attracted interest from activist investors. In 2024, Irenic Capital Management built a stake in the company and said it planned to push for a separation of its business segments, WSJ previously reported.
Activist investors often press companies to simplify corporate structures and divest underperforming or non-core assets.
Source: Reuters.com