DealLawyers.com Blog

November 30, 2018

Activism: The European Market

This recent report from Activist Insight & Skadden provides an overview of shareholder activism in Europe during 2018. This excerpt from the intro addresses the year’s key themes:

Three themes stand out from 2018’s experience. First, the appeal of European and specifically U.K.-listed assets to American buyers. The likes of Whitbread, SodaStream, and Sky sold themselves or business divisions to U.S. buyers in the first nine months of the year, while the number of U.K.-based companies subjected to public demands by U.S.- based activists has doubled from 2017 to 2018.

Second, the fulfillment of a prediction made in last year’s Activist Investing in Europe report, when we wrote that “U.S. activist interest in Europe has increased and the groundwork has been laid for a sustained level of activism.” ValueAct Capital Partners now has three significant investments in the U.K., including the only non-U.S. stake in its impact investing fund, while Trian Partners raised 270 million pounds through the London Stock Exchange for what may be a U.K. target.

Third, the big campaigns have been less event-driven and more operational in nature. Non-European-based activists are more likely to push for M&A-related demands, a fact that was in evidence last year at Clariant and AkzoNobel. But ValueAct and Trian are known for their operational focus, while the year’s biggest headlines were generated by Elliott Management’s proxy contest at Telecom Italia, where the Italian government intervened to prevent asset sales. ThyssenKrupp, where Elliott and Cevian Capital pushed for a looser conglomerate structure, was more complicated than a mere breakup play, even though the interim CEO ultimately fell behind a plan to split the business in two.

Despite the increasing focus on operations, the report says that 2018 appear to exceed 2017’s level of public demands for M&A, with 17 such demands recorded during the first 3 quarters of 2018 compared to 15 during the same period last year.

John Jenkins