January 2, 2018

Shareholder Activism: Ask Not for Whom the Bell Tolls. . .

This recent article from summarizes¬†a panel discussion among M&A experts about the state of shareholder activism. The panelists’ bottom line conclusion – in today’s environment, nobody’s immune from activism. Here’s an excerpt:

Insurgent investors have begun targeting better performing, and larger capitalization corporations in new sectors all of which suggests that no publicly-traded company can comfortably say it won’t find itself in an activist’s crosshairs, a panel of M&A experts said Thursday at The Deal Economy Conference.

“Nobody is immune to it,” said Adel Aslani-Far, a partner at Latham & Watkins LLP at the 15th annual The Deal Economy Conference in New York. “It no longer is that you have to be performing poorly to be the target of activism, you’ve seen in the last eighteen months to two years companies getting into activist sights that you would never have thought would get into activist sites, including companies with market caps that you would never have thought would have attracted the kind of investment by activism.”

The article notes that according to FactSet, there had been roughly 803 activist campaigns through November 2017, up from 737 for all of 2016. These included recent campaigns against high-profile targets such as Procter & Gamble and ADP. Activists are less inclined to break furniture in their approach to target companies, & are becoming more “elevated and mature” in their approach. In turn, this has prompted boards to become more sophisticated in their responses to activists, and perhaps more strategic in their overall thinking.

John Jenkins