November 4, 2020
Activism: Third Quarter Highlights
This Lazard report summarizes shareholder activism during the third quarter of 2020. Here are some of the highlights:
– Q3 2020 represented the lowest level of quarterly activist activity since 2013; only 24 campaigns were launched globally in Q3 2020, down 41% from Q2 2020 and 54% lower than Q3 2019 levels
– Q3 capital deployed dropped to seven-year lows (approximately $4.4bn), down over 60% sequentially and year-over-year.
– Q3 U.S. campaigns were down 41% from Q2 and 64% versus Q3 2019; capital deployed decreased 39% from Q2 and 65% compared to Q3 2019.
– Q3 European campaigns were consistent with Q2 but down 62% compared to Q3 2019; capital deployed increased by 2% from Q2, but decreased 63% versus Q3 2019.
– 50% of Q3 campaigns featured an M&A objective, recovering from approximately 34% in H1 2020 and consistent with 2019. The return of M&A as an objective coincided with a resurgence of M&A in Q3 2020 after a quiet first half of the year.
While the number of campaigns and the amount of capital deployed may both be down substantially, the number of directorships activists have won is not. Through the end of the third quarter, activists are winning just as many board seats as in prior years.
However, of the 100 Board seats won by activists this year, only 35 are attributable to campaigns initiated in 2020. Starboard & Elliott Management remain the most successful activists when it comes to board seats, accounting for over 1/3rd of the seats won so far in 2020.
– John Jenkins