Activist hedge fund Starboard Value has built a substantial stake in Solstice Advanced Materials, pushing the Honeywell spin-off to cut $100m in costs and focus on its core businesses following the collapse of a proposed $14.5bn acquisition, according to a report by the Financial Times.

Starboard, which manages $8.2bn, has accumulated several hundred million dollars' worth of shares in the US speciality chemicals group, making it one of the company's ten largest shareholders.

The hedge fund is pressing Solstice to reduce corporate overheads and improve execution across its refrigerants and nuclear businesses, with particular emphasis on the growth potential of its uranium enrichment operations.

Solstice is one of a limited number of companies outside Russia and China capable of supplying a key chemical used in uranium enrichment. Starboard sees opportunities for the business as AI-driven electricity demand supports investment in nuclear power, while a US deadline to end imports of Russian enriched uranium by 2028 could provide further growth.

The activist campaign follows Solstice's abandoned $14.5bn cash-and-stock acquisition of Element Solutions, which was cancelled in August after shareholders questioned the strategic rationale and valuation of the transaction.

Solstice shares remain 26% below their level before the deal was announced in July, having surrendered most of the gains recorded following its separation from Honeywell last October. The company had a market capitalisation of approximately $9.6bn at Monday's close.

Starboard founder and chief executive Jeff Smith is expected to disclose the investment at the 13D Monitor Active-Passive Investor Summit on Tuesday.

The campaign adds pressure on Solstice chief executive David Sewell to restore investor confidence following a turbulent first year as an independent company. Analysts at BMO Capital Markets have also suggested that the nuclear division could command a higher valuation as a standalone business.