Activist investing is at an all-time high and large companies are particularly vulnerable to packs of agitators that may not even have the same agenda, according to one of Goldman Sachs Group Inc.’s top dealmakers. “We used to refer to this as a wolfpack — wolfpack implies some kind of coordination,” said Avinash Mehrotra, global head…
Tag: activist investors
Carl Icahn: Let Proxy Advisers Do Their Work – WSJ
Investors cast tens of thousands of votes as owners of public companies in any given year. For help with that formidable task, many institutional investors pay proxy advisory firms like Institutional Shareholder Services or Glass Lewis for independent advice. These research organizations publish reports with voting recommendations. More often than not, they end up taking…
Bed Bath & Beyond Shakes Up Board of Directors
Considering the major shakeup Bed Bath & Beyond (NASDAQ:BBBY) just announced for its board of directors, it seems management believes the activist investors pushing for a complete overhaul of the home goods retailer might have a good chance of success. The home goods retailer announced it was replacing five directors and increasing the number of…
Do “Golden Leashes” Conflict with Directors’ Fiduciary Duty?
Some activist shareholders want to make side payments to the directors they put on boards. Is that good or bad for the other shareholders? Gregory H. Shill writes: Traditionally, activist hedge funds identify a company ripe for improvement, acquire a toehold position in the company’s stock, and then launch a campaign to convince shareholders to…
At BlackRock, Vanguard and State Street, ‘Engagement’ Has Different Meanings – WSJ
Sarah Krause writes in the WSJ about large institutional investors’ differing views of “engagement,” noting that they also differ on their analysis of particular engagement/activism opportunities. The biggest passive money managers all like to use some version of the word “engage” when describing how they hold their portfolio companies accountable behind the scenes. They differ on…
Do Activists Turn Bad Bidders into Good Acquirers?
A new paper documents the beneficial impact of activist investors in optimizing corporate transactions. In our new working paper, Do Activists Turn Bad Bidders into Good Acquirers?, available on SSRN, we uncover a new role of activists in the market for corporate control. We present evidence that activists curb incentives to engage in empire building…
The Legal Validity of Oral Agreements with Activist Investors
This one reads like a law school case study. In the 21st century, it is highly unusual that parties, especially adverse parties, would enter into an agreement without putting it into writing. It is even more unlikely that a dispute over an oral agreement would go all the way to trial. And yet that is…
Impact of Shareholder Activism on Board Composition/Tenure
IRRCi has a new report: The Impact of Shareholder Activism on Board Refreshment Trends at S&P 1500 Firms It concludes: Activism drives down director ages. Dissident nominees and directors appointed via settlements (hereinafter Dissident Directors) were younger, on average, than directors appointed unilaterally by boards (hereinafter Board Appointees) in connection with shareholder activism. Study…
Investor activism is surging in continental Europe
Leave it to the Americans to besiege European companies in August, when the entire continent is on holiday. It emerged this month that Corvex Management, an American hedge fund, had built up a $400m position in Danone, a French food giant. AkzoNobel, a Dutch paints-and-chemicals firm which has been under heavy fire from Elliott Advisors,…
Danone can stomach new activist investor – Breakingviews
Carol Ryan writes approvingly about a small stake by an activist investor in a previously entrenched French company: Danone can stomach a new activist investor. A stake reportedly taken by U.S. hedge fund Corvex Management in the French yoghurt maker may be small, but would bring welcome pressure on management to meet its new margin…
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