This recent article from Nasdaq’s Center for Board Excellence discusses the insights provided by a panel of experts on shareholder activism during a recent webcast on post-proxy season trends in activism. Panelists included Avinash Mehrotra, Co-Head of Americas M&A and Global Head of Activism & Raid Defense, Goldman Sachs; Marc Goldstein, Head of U.S. Research, Institutional Shareholder Services (ISS); Lori Keith, Board Member, e.l.f. Beauty, Portfolio Manager & Director of Research, Parnassus Investments; and Gabriella Halasz-Clarke, Head of Governance and Sustainability Solutions, Nasdaq.
One of the topics addressed by the panel was how to navigate common activist demands. This excerpt from the article summarizes their advice:
To stay ahead of potential interventions, boards should be able to anticipate activist demands and prepare strategic responses. Three common areas of activist focus include:
1. Return of Capital
Activist Demand: Activists may argue that a company is hoarding cash and that the excess should be returned to shareholders via increased dividends or share buyback programs.
Board Strategy: Regularly review cash management strategies to ensure they align with short-term and long-term objectives. Clearly communicate capital allocation rationale to shareholders to preempt misconceptions or activist criticisms.
2. Business Simplification
Activist Demand: Activists may claim that a company with multiple lines of business lacks strategic focus and efficiency. They often push for restructuring or divestiture of non-core assets.
Board Strategy: Thoroughly evaluate business units for strategic fit and performance. Consider divestiture where appropriate to streamline operations and unlock value.
3. M&A Activity
Activist Demand: Activists scrutinize M&A strategies—especially if execution falters.
Board Strategy: Continuously assess market dynamics to identify opportunities and threats. Articulate to shareholders how M&A aligns with corporate strategy.
The article says that including these topics into the ongoing boardroom dialogue will permit directors to provide swift and strategic responses to activist initiatives that aligned with the board’s long-term vision.
– John Jenkins
According to Dykema’s “2025 Mergers & Acquisitions Outlook Survey,” dealmakers are fairly upbeat about the prospects for increased M&A activity during the upcoming year. Here are some of the findings:
– When asked whether they expect their company or one of their portfolio companies to be involved in a deal over the next 12 months, the majority of respondents said yes. Acquisitions led the way, with (69%) anticipating activity, followed by joint ventures at (52%), and sales at (50%). These figures reflect a notable uptick from 2024, when (61%) expected acquisitions, (47%) anticipated joint ventures, and (46%) projected sales.
– There’s still plenty of economic uncertainty out there, with respondents citing general economic conditions (42%) and financial market conditions (32%) as the top two factors posing obstacles to deal activity in the next year. Tariffs emerged as a significantly greater concern in 2025, with 30% of respondents identifying them as a key obstacle to dealmaking—up sharply from just 8% in 2024. Company valuations (29%) and availability of quality targets (22%) are also key factors.
– In response to macroeconomic conditions, respondents report shifting their M&A strategy to focus on strategic acquisitions and to mitigate economic uncertainty and the impact of tariffs. When we asked survey participants how their approach to dealmaking has evolved this year, their open-ended responses revealed a clear theme: caution, selectivity, and adaptability.
– 83% of respondents believe PE investors will boost deal volume in the coming year, and 76% expect due diligence to remain a top priority.
– A majority of respondents expect to work on deals involving ESG risk screening in the next year, highlighting its growing role in M&A strategy. Meanwhile, 62% anticipate increased use of R&W insurance, though most expect only a modest rise. Just 4% foresee any decrease in usage.
The survey was conducted in August and September 2025 and contains insights from 216 M&A professionals, including executives, attorneys, bankers, and private equity leaders.
– John Jenkins
Last week, the Chancery Court issued its post-trial opinion in Camaisa v. Pharmaceutical Research Associates, (Del. Ch.; 10/25), which involved fraud claims arising out of alleged oral statements made by a buyer’s representative concerning the autonomy of an acquired business. When the business subsequently failed to achieve contractual earnout milestones, the plaintiff sued, raising the alleged oral statements in support of fraudulent inducement allegations.
Vice Chancellor Cook was unimpressed. In light of explicit contractual language giving the buyer broad discretion to run the business as it saw fit, the parties post-closing conduct and other evidence impugning the credibility of the allegations, he ruled in favor of the defendants. However, the key takeaway from the opinion was the consequences of the failure to include anti-reliance language in a merger agreement, which converted a case that could have been resolved at the pleading stage into one requiring a full-blown trial.
The Vice Chancellor pointed out that the merger agreement not only didn’t include an anti-reliance clause, but that Section 6.13 of the agreement provided that “[n]otwithstanding anything to the contrary contained in this Agreement, none of the provisions set forth in this Agreement shall be deemed a waiver or other limitation by any Party of any right or remedy which such Party may have at Law or in equity against a Person based on any fraud.” In concluding his opinion, Vice Chancellor Cook pointed out the significant consequences of that choice of language:
This case presents a pointed example of why it is important for transactional parties to draft contractual language concerning fraud carefully. The parties here failed to include an anti-reliance clause in the Agreement. Instead, they bargained for an unusual provision, Section 6.13, which expressly disclaims waiver or “other limitation” of “any fraud” claim “[n]otwithstanding anything to the contrary contained” in the Agreement, including Sections 2.7(h) and 6.6.
When drafters include phrases like “notwithstanding anything to the contrary,” they should perhaps do so with pause and certainly in full awareness of such phrases’ powerful effect. Here, a fraud claim that could otherwise have been resolved at the pleading stage with a handful of drafting changes became something else entirely.
– John Jenkins
It’s been a long time since we’ve seen a deal jumping attempt as brazen – or as high stakes – as the one that Novo Nordisk is trying to pull off with the pending deal between Pfizer and Metsera. The first thing that’s pretty wild about Novo Nordisk’s move is the structure of its proposal. Here’s an excerpt from Metsera’s 8-K filing describing the terms of Novo Nordisk’s proposed deal:
The Novo Nordisk Proposal is structured in two steps (together, the “Novo Nordisk Transaction”). In the first step, promptly following the signing of the Novo Transaction Agreements (as defined below), a Novo Nordisk subsidiary would pay to Metsera an amount equal to $56.50 per Metsera common share in cash as well as certain amounts in respect of Metsera employee equity and transaction expenses. In exchange, Metsera would issue Novo Nordisk shares of non-voting convertible preferred stock (the “Non-Voting Convertible Preferred Stock”) representing, in the aggregate, 50% of Metsera’s fully-diluted share capital on a post issuance basis. On the same day, Metsera would declare a dividend of $56.50 per Metsera common share, in cash, with a record date ten days following the signing of the Novo Merger Agreement with payment to follow in the days shortly thereafter.
In the second step, which would happen only after receiving approval from Metsera shareholders and relevant regulators as well as the satisfaction of other customary conditions, holders of Metsera common stock and certain employee equity awards would receive one contingent value right (“CVR”) per Metsera common share, subject to certain exceptions, representing the right to receive up to $21.25 in cash based on the achievement of certain development and regulatory approval milestones as described further below (which are substantially the same as those that would be issued in connection with the Pfizer Merger Agreement), and Novo Nordisk would acquire the remainder of the outstanding shares of Metsera via a merger of Metsera with and into a subsidiary of Novo Nordisk.
That non-voting preferred stock would be convertible into common stock to the extent permitted by law, and would rank on a par with Metsera’s common stock on an as-converted basis when it comes to dividends and liquidation rights. In addition, the preferred would convert into common in connection with any transfer of the shares to a non-affiliate of Novo Nordisk.
There are restrictions on transfer of the preferred stock to non-affiliates prior to termination of a merger agreement between Metsera and Novo Nordisk. Those restrictions lapse over a two-year period following such termination. The preferred stock also has the right to force a redemption during the three-year period following termination of the merger agreement in connection with a topping bid or a subsequent acquisition transaction.
Not surprisingly, Pfizer is crapping all over Novo Nordisk’s bid. Here’s an excerpt from its press release responding to the proposal:
Pfizer Inc. (NYSE: PFE) is aware of the reckless and unprecedented proposal by Novo Nordisk A/S (NYSE: NVO) to acquire Metsera, Inc. (NASDAQ: MTSR). It is an attempt by a company with a dominant market position to suppress competition in violation of law by taking over an emerging American challenger. It is also structured in a way to circumvent antitrust laws and carries substantial regulatory and executional risk. The proposal is illusory and cannot qualify as a superior proposal under Pfizer’s agreement with Metsera, and Pfizer is prepared to pursue all legal avenues to enforce its rights under its agreement.
On Friday, Pfizer put its money where its mouth is and filed a lawsuit against Metsera, its board, and Novo Nordisk alleging breaches of the merger agreement and tortious interference.
Metsera’s board apparently disagrees with Pfizer’s assessment and has informed Pfizer that it believes Novo Nordisk’s bid represents a “Superior Company Proposal” under the terms of its merger agreement. Your mileage may vary on the competing assessments of whether Novo Nordisk has submitted a Superior Company Proposal, but if you’re interested, that term is defined in Section 5.02(h) of the merger agreement. Here’s the WSJ’s take on the Superior Company Proposal issue, which notes that Metsera previously rejected a similarly structured proposal from Novo Nordisk:
If Novo’s bid is truly superior, why didn’t Metsera accept a similar one the first time? Why did the Metsera board, as the proxy statement shows, prod Pfizer to sweeten its deal? Under the merger agreement, the definition of “Superior Company Proposal” refers to a weighing of not just price but also regulatory, financing, timing, and legal risks. While shareholders might get more money under Novo’s proposal, Pfizer’s argument that Metsera can’t pay out the dividend under Delaware law and Pfizer’s request for a temporary restraining order to block the merger’s termination already have made Novo’s offer, in essence, riskier.
Pfizer’s press release also pushed all the buttons necessary to attract the attention of antitrust regulators, and its argument that Novo Nordisk has structured its bid to “circumvent antitrust laws” has received some attention from Ann Lipton in a LinkedIn post. There, she points out that Toshiba and Canon got into antitrust trouble a few years ago by using a non-voting preferred stock deal structure to, according to the FTC & DOJ, evade HSR filing requirements.
Section 5.02(e) of the merger agreement gives Pfizer match rights during the four-day period following receipt of notice from Metsera that a Superior Company Proposal has been received, and with Pfizer already throwing punches, it looks like there are going to be several more twists and turns to this transaction before the dust settles. So, sit back and make some popcorn – but since this fight is all about obesity drugs, maybe use the air popper & leave out the butter.
– John Jenkins