July 26, 2021

Activism: 2021 First Half Highlights

This Lazard report reviews shareholder activism during the first half of 2021. Here are some of the highlights:

– 94 new campaigns were initiated globally in the first half of 2021, in line with 2020 levels. Year-over-year stability buoyed by a strong Q1, with Q2’s new campaigns launched (39) and capital deployed ($9.1bn) below multi-year averages.

– The first half of 2021 was distinguished by several high-profile activist successes at global mega-cap companies, including ExxonMobil (Engine No. 1), Danone (Bluebell and Artisan Partners) and Toshiba (Effissimo, Farallon, et al.)

– U.S. share of global activity (59% of all campaigns) remains elevated relative to 2020 levels (44% of all campaigns) and in line with historical levels.  The 55 U.S. campaigns initiated in the first half of 2021 represent a 31% increase over the prior-year period.

– 44% of all activist campaigns in H1 2021 featured an M&A-related thesis, in line with the multi-year average of 40%. Among all global M&A-focused campaigns in H1 2021, 56% centered on scuttling or sweetening an announced transaction (and accounted for all European M&A-focused campaigns). In contrast, campaigns pushing for an outright sale of the company accounted for only 12% of M&A-related campaigns in the first half of 2021, below the multi-year average of 34%.

The report also notes that investor support for ESG campaigns reached an all-time high, with14% of all proposals passed in H1 2021, up from a three-year average of 6%, and that short activism targeting de-SPACed companies has emerged as an increased threat in H1 2021, with prominent short sellers, such as Hindenburg Research, attacking high-profile de-SPACs such as DraftKings, Lordstown Motors and Clover Health.

John Jenkins