January 6, 2025
Activism: Mid-cap Companies See Surge
FTI Consulting recently published its latest Activism Vulnerability Report, which provides an overview of the state of play in shareholder activism & ranks the vulnerability of various industries to activist campaigns. As this excerpt describes, mid-cap companies are more often finding themselves the targets of activist campaigns:
Mid-cap companies, in particular, have seen a surge in activist interest, accounting for 25% of total campaigns in 3Q24, compared to just 10% a year earlier. This shift is not without reason: year-to-date through November 1, activists are achieving higher success rates in the mid-cap segment, with an impressive 74% of concluded mid-cap campaigns delivering favorable outcomes for activists in 2024, up from 51% during the same period last year.
Here are some other notable trends referenced in the report:
– A friendlier M&A backdrop could underpin a pickup in the number of activist campaigns in 2025. For the nine-months ended September 30, 2024, there have been 40 activist campaigns with explicit demands for M&A, up 17% over the same period in the prior year, suggesting the optimism may begin to materialize.
– Board seats gained by activists in U.S. companies through September 30, 2024, remained relatively steady compared to the same period in 2023. However, the pathways to these seats shifted, with fewer board seats achieved through settlements and a slight uptick in board seats won through proxy contests.
– The Utilities industry climbed seven places to become the most vulnerable sector to shareholder activism, while Media & Publishing maintained its hold on second place, and Real Estate edged up one position to complete the top three.
– Meredith Ervine