One of Vodafone’s biggest shareholders has backed chief executive Nick Read’s plans to overhaul the telecoms giant despite pressure from an activist investor. 

Abrdn, the fourth-largest investor, said Vodafone’s management had been “explicit” about how it planned to bolster value and had the “widespread support of shareholders”. 

The Swedish activist investor, Cevian Capital, has taken a stake in the FTSE 100 company and has been holding talks with management in recent weeks on how to improve performance, as it grapples with a languishing share price. 

Cevian’s discussions with management are understood to have centred around proposals to simplify Vodafone and make it a more focused business. 

Mr Read has been urging competition regulators to open the doors to industry consolidation to boost returns as he weighs a European merger spree across Italy, Spain and Portugal. 

The move follows efforts to transform Vodafone into a much simpler company focused on Europe and Africa, from spinning off its towers into a standalone business and offloading fringe operations in New Zealand, to writing down the value of its India joint venture. 

Andrew Millington, head of UK equities at abrdn, said: “Vodafone management have been explicit in recent months about their intention to explore ways to create value through either in-market consolidation or towers consolidation. While I have no insight into Cevian’s plans, I think this approach has widespread support from shareholders.”

Vodafone’s shares have fallen by a third over the past five years amid stalling momentum and poor growth in many of its major markets. 

However, the stock rose as much as 5pc following the news that Cevian had built a stake, to close 2pc higher at 130.2p, valuing the company at just over £35bn.