February 27, 2020

Activism: “More M&A in Activism and More Activism in M&A”

Schulte Roth recently published its “2020 Shareholder Activism Insight” report, and it had some interesting things to say about M&A activism.  After noting that M&A transactions accounted for 14% of 2019’s activist demands, the report quotes Schulte’s Aneliya Crawford as saying that M&A will remain a strong activist theme in the current year:

My prediction for 2020 is that we will see more M&A in activism and more activism in M&A. We are already seeing strong signs of the convergence of activist strategies and private equity. Competing bidders are also considering campaigns in opposition to announced deals and weighing tender offers to demonstrate to boards and shareholders the strength of an alternative transaction.

Our clients are also showing greater openness to hostile approaches of potential targets. We are spending a lot of time strategizing and negotiating deals that straddle the hostile and friendly arena and framing the conversation with boards where both avenues might be pursued in parallel until a deal is finally reached.

Last year, I blogged about how the lines were blurring between activist investors & private equity funds. At the time, the focus was on activists looking to play the role of PE buyers, but situations like KKR’s recent acquisition of a stake in Dave & Buster’s indicate that PE funds are dipping their toes into the activist side as well.

John Jenkins