Ananym Capital has intensified its campaign urging LKQ Corporation to sell its European business, arguing that a divestiture would unlock shareholder value and fund substantial share buybacks, according to a report by Reuters.
In a letter to LKQ’s board seen by Reuters, the activist hedge fund said there are interested buyers for the European arm and reiterated that maintaining both the North American and European divisions under one structure “makes little sense.”
Ananym cited LKQ’s prolonged underperformance, noting that total shareholder returns have lagged peers by 33% over 12 months, 113% over five years, and 253% over the past decade. The fund argues that management should prioritise the company’s North American collision business, describing it as LKQ’s “crown jewel,” rather than continuing to integrate disparate European operations across 900 sites and 18 countries.
The letter follows LKQ’s third-quarter earnings, where strong North American results contrasted with continued European challenges. Shares rose over 5% post-results but remain down 16% year-on-year, valuing the company at roughly $8bn.
Ananym suggested that proceeds from a potential European sale could be used to reduce leverage and buy back stock, delivering greater returns than ongoing restructuring efforts.
Founded in 2024 by Charlie Penner – best known for his role in the ExxonMobil board campaign – and Alex Silver, Ananym has been in dialogue with LKQ for several months. The fund escalated its push for a separation following disappointing second-quarter earnings.
LKQ declined to comment on the contents of the letter but said it “regularly engages with shareholders.”
