April 11, 2024

Activism: M&A Demands Still Feature Prominently in Campaigns

A recent memo from H/Advisors Abernathy’s Dan Scorpio highlights some of the early lessons to be drawn from this year’s proxy season. One of those lessons is despite the lull in M&A activity in recent periods, M&A demands still feature prominently in activist campaigns:

A vocal push for (or against) M&A has been a core component of the activist playbook over the last several years, accounting for about 50% of activist campaigns. M&A demands were popular among activists even through 2023, when U.S. M&A activity fell by approximately 40%, but these demands evolved to calls for divestitures of non-core assets or breakups. Amid mixed messages in the M&A market so far this year – $725 billion of M&A was announced in Q1 2024, but a lower volume of deals, according to Dealogic – M&A accounted for about one-third of activist demands.

Dan says that if the M&A rebound continues, companies should expect activists to ramp up their demands for companies to sell themselves.

John Jenkins