Barclays’ latest review of quarterly activism developments covering the second quarter and first half of 2026 was released earlier this month. Activity was up, and the U.S. was driving that trend. Here are some key takeaways:
– 68 [U.S.] campaigns were up 13% year-over-year (60 in H1 2025) and represented half of total activity
– A record 52% of all H1 campaigns were at Industrials and Technology companies
– Sector concentration is rising as activists increasingly target companies exposed to AI-linked disruption, spanning direct adoption and adjacent infrastructure themes
– The top 10 activists – led by Elliott and followed by other serial activists, such as Oasis, Dalton, Irenic and Palliser – accounted for 41% of all H1 campaigns
– In a divergence from recent trends, 72 unique activists launched campaigns in H1 2026 – meaningfully lower than the four-year H1 mean of 97
– M&A demands were the most prevalent H1 campaign objective at 39% of all campaigns, driven by a 63% sequential spike in Q2
The July-August issue of the Deal Lawyers newsletter was just sent to the printer and is also available online to members of DealLawyers.com who subscribe to the electronic format. This issue includes the following articles:
– Chancery Decision Highlights Need for a “Remedy Hierarchy” in a Post-Closing Purchase Price Adjustment Provision
– A Purchase-Price Adjustment Is Not the End of the Road with Indemnification on the Table
– Are Hints Disclosures? Delaware Supreme Court Revives M&A Fraud Claim Despite Buyer’s Red Flags
– AI Meets National Security — Implications for Private Equity and M&A
The Deal Lawyers newsletter is always timely & topical – and something you can’t afford to be without to keep up with the rapid-fire developments in the world of M&A. If you don’t subscribe to Deal Lawyers, please email us at info@ccrcorp.com or call us at 800-737-1271.
This recent study from The University of North Carolina’s Institute for Private Capital finds that fundless sponsors – a group that many have looked their noses down at over the years – have actually outperformed traditional private equity funds in recent years. Here’s an excerpt from the study’s conclusion, which refers to fundless sponsors as “independent sponsors”:
Our performance analysis shows that independent sponsor investments have generated strong absolute returns and, more importantly, competitive-to-superior relative performance compared to matched non-IS buyout transactions. Focusing on investor-reported transactions, we find average(median) gross TVPIs of 2.9 (2.1) and average (median) gross IRRs of approximately 29% (24%) for seasoned transactions. When benchmarked against carefully matched buyout investments by entry year and size, IS investments exhibit positive excess performance with statistically significant outperformance on average.
At the same time, we find no statistically meaningful differences in loss incidence or downside severity between IS and non-IS investments, suggesting that higher returns are driven by greater upside rather than lower risk. These results are consistent with the hypothesis that independent sponsors are able to exploit informational frictions, sourcing advantages, and bespoke structuring opportunities that persist in smaller and more complex private companies.
The study says that most fundless sponsor activity is in the lower middle market, and suggests that targeting this market segment, as well as the traits of the people involved in fundless sponsors may be part of the reason for their success:
The typical independent sponsor in our sample is experienced, operates with one or more partners, and brings prior backgrounds in private equity, investment banking, and operations, consistent with the emergence of a professionalized and increasingly institutionalized IS ecosystem. Taken together, these findings support the view that independent sponsors are not merely opportunistic intermediaries, but rather specialized providers of sourcing, structuring, and operational expertise in segments of the market that are less competitive and less standardized.
Divisive transactions like spin-offs and carve-outs often require the parties to address the post-closing use of shared technologies. This WilmerHale podcast offers some guidance on that topic. In this excerpt from the transcript, WilmerHale’s Stephen Gillespie discusses the major challenges that shared technologies present for transaction planners:
I think there’s really two key challenges in identifying and mitigating the risk of shared technology in any divestiture. And those are scale and knowledge gaps. So big companies might have hundreds or even thousands of vendor agreements and inbound licenses related to shared technology. And the people who know the details of those license agreements in IT and human resources and finance, those people with knowledge are often siloed in their particular function. And sometimes the business being sold doesn’t even know that a sale is coming. So you can’t consult with them early in the process.
Stephen goes on to say that in order to appropriately address shared technology issues, dealmakers need to build a cross-functional team early on in the process to identify the intellectual property shared by the companies involved in the spin-off or carve-out. All of the relevant contracts then need to be reviewed for divestiture clauses, restrictions on assignment and change-of-control provisions in order to determine the rights the parties have and what post-closing licensing arrangements will be necessary.
This Skadden memo discusses the increasing level of corporate political engagement and the increasingly complex legal environment surrounding corporate political activities. It points out that potential buyers must ensure that their due diligence investigation of a prospective target includes an assessment of the target’s political activities and the risks associated with them.
This excerpt provides an overview of some of the risks associated with corporate political activities and the laws that may be implicated by them:
With increased political engagement comes increased risk. A target’s political law missteps can result in reduced profits, costly investigations, and, in some cases, a material impact on valuation. Higher-risk companies include those that are, or may soon be, highly regulated and those with significant government contracts, large government relations or public policy operations, or politically active management or owners.
Unlike antitrust, tax, and environmental diligence, however, political law vetting is not yet standard in M&A practice, creating blind spots that can prove costly after closing. The relevant bodies of political law span several areas, including anti-corruption, pay-to-play, campaign finance, lobbying, gifts and entertainment, government conflict of interest, and government procurement.
The legal consequences for a violation of these laws can, in some cases, be severe. Under strict liability pay-to-play laws, a political contribution by a company or a covered director or employee — or even their spouse or child — can trigger an automatic ban on government contracts in that jurisdiction, in some cases for several years.
The memo goes on to provide guidance on how to vet political risks involved in a target’s business and how to structure a transaction to mitigate those risks if they potentially significant.
The “Background of the Merger” section of a proxy statement is clearly the most challenging part of drafting that document. Everyone involved in the deal knows that this is the disclosure that’s going to be most closely scrutinized by the SEC and the plaintiffs’ bar, so a lot of effort typically goes into preparing and refining the disclosure contained in that section. If you’re called upon to take the lead in drafting this section, check out this Debevoise memo, which offers some practical tips on how to approach that job. This excerpt discusses the importance of a coordinated review of that disclosure by key transaction participants:
A coordinated review by the principal participants in the transaction can help identify factual inaccuracies, resolve inconsistencies, and ensure that the final disclosure fairly reflects the contemporaneous record. This review should include close coordination with financial advisors and their counsel to ensure that the Background section, the summary of the financial advisor’s fairness opinion, and related disclosure elsewhere in the proxy statement consistently describe the transaction process, financial projections, negotiations, and the analyses considered by the board.
It should also confirm that the proxy statement accurately describes each financial advisor’s material relationships with the counterparty and its affiliates, as well as the advisor’s compensation arrangements—generic references to “customary compensation” and undisclosed concurrent engagements for a buyer or its consortium members can render stockholder approval uninformed.
The Background section should also be reviewed by the directors of the company. Directors should carefully review the Background section to confirm that it fairly and accurately reflects the board’s deliberations and the transaction process as a key element of their review of the proxy statement as a whole.
Acquirors and their counsel should likewise carefully review those portions of the Background section describing their interactions with the target, as disclosure claims can create litigation risk for the buyer, either directly through aiding-and-abetting claims or indirectly through the costs, delays and potential liability associated with transaction litigation.
If you’re looking for more guidance on preparing “Background of the Merger” disclosures, I actually wrote an article on the topic that appears on p. 4 of the January-February 2021 issue of our Deal Lawyers newsletter. One piece of advice from that article that I think is worth sharing here is the importance of sharing your draft disclosure with a litigator:
Ask a Litigator to Read the Draft. I also highly recommend sharing your draft with an experienced litigator. Deal lawyers accustomed to the rough and tumble M&A negotiation process are frequently a bit jaded, and in the hands of a skilled plaintiff’s lawyer, descriptions of aspects of the process that may not have given them pause may be made to look pretty bad to a judge or jury. Having an experienced litigator review your draft can help you identify and address these issues. A good litigator can also provide some more mundane guidance about as areas in which it may be prudent to add – or pare back – draft language.
Last month, CFIUS issued a new Risk Matrix clarifying the issues it is likely to focus on when reviewing a potential transaction and outlining the types of safeguards that may be required to address its concerns. This excerpt from a recent Simpson Thacher memo summarizes the new Risk Matrix:
On July 29, 2026, the U.S. Department of the Treasury (“Treasury”), as Chair of the Committee on Foreign Investment in the United States (“CFIUS” or the “Committee”), published new guidance for the public in the form of a CFIUS Risk Matrix.
The Matrix identifies eight categories of common national security risks often identified during the CFIUS process (i.e., critical infrastructure, cybersecurity, information security, personal data security, product integrity, proximity concerns, supply assurance and technology transfer), as well as an explanation of the vulnerabilities that can arise with respect to foreign ownership in businesses with such risks. In addition, the Matrix also sets out the purpose of mitigation for each category and provides a list of sample mitigation terms frequently used in mitigation agreements.
The memo says that, in addition to giving companies and their advisors a clearer roadmap of the national security issues that CFIUS is likely to focus on, it also makes the review process more predictable and transparent by outlining what it may require to address those concerns.
Last week, in Gladstone v. EBC Holdings, Inc.(Del. Ch.; 8/26), Vice Chancellor Fioravanti addressed a statutory appraisal action arising from a 2022 stock-for-stock reorganization that collapsed a dual holding-company structure that held a boutique broker-dealer specializing in underwriting SPACs. The parties supported “starkly” different valuations at trial. Petitioner’s expert used a capitalized cash flow analysis and added cash and securities as assets that were valued separately, resulting in $18.50 per share. Respondents’ expert used an equity-level dividend discount model and a guideline public company analysis with resulting values of $6.79 to $7.29 per share.
Complicating the analysis were the company’s regulatory capital requirements – specifically, whether those requirements should limit the amount of cash and investments treated as separately valued – as well as challenges in valuing the securities portfolio, given the timing of closing and further deterioration of the SPAC market thereafter and the SEC’s proposed (at the time) SPAC rules that would increase underwriting costs. VC Fioravanti ultimately applied a capitalization-of-earnings approach and then adjusted for cash reasonably required to support operations and the value of the securities portfolio.
As far as the complicating factors, he:
– Determined that the company needed $30 million of regulatory capital to support its underwriting business, which he excluded from any separate addition of liquid, allowable assets;
– Declined to adopt post-closing securities valuations reflecting the decline in the value of the nonmarketable SPAC securities portfolio (due to the reduced possibility that SPACs would complete de-SPAC transactions) as operative measures of value because, while post-merger evidence can help validate what was knowable at the merger date, this post-merger analysis should be treated as “informative but not dispositive;” and
– Declined to accept respondents’ expert’s adjustment for potential increases in underwriting expenses resulting from the SEC’s SPAC rule proposal since he found that it was too speculative, though he acknowledged that the proposal introduced “meaningful regulatory uncertainty.”
His analysis resulted in a valuation of $11.08 per share.
Earlier this week, in In Re Via Renewables, Inc. Merger Litigation (Del. Ch.; 8/26), the Delaware Chancery Court added to the list of cases finding that MFW‘s conditions weren’t met. The litigation challenged a squeeze-out transaction with a founder-controlling stockholder. (This was a pre-SB 21 transaction.) The special committee repeatedly insisted on MFW protections but faced pushback from its controlling stockholder. The controller submitted a take-private proposal in September 2023 that was withdrawn after the committee requested MFW protections. But the parties continued to negotiate, with the majority-of-the-minority vote remaining a sticking point. The controller submitted a new offer in November and finally agreed to MFW protections in December.
But, as the opinion details:
Between November 15, when Maxwell sent the $9-per-share offer, and December 15, when Maxwell formally assented to MFW conditions, Maxwell and the Committee negotiated the length of a go-shop period, as well as Maxwell’s ability to use his Company stock as collateral to secure financing. The Committee also made a counterproposal of $12.65 per share after consulting its financial advisor. In fact, these negotiations all occurred prior to the Committee sending Maxwell the revised Merger Agreement with MFW conditions on December 7.
Chancellor McCormick found this to be an issue, at least at the dismissal stage:
Plaintiff advances many arguments for why Defendants did not comply with MFW. One suffices. For MFW to replicate arm’s length negotiations, the conditions must be established up front. This “require[s] the controller to self-disable before the start of substantive economic negotiations.” Establishing the dual protections of MFW’s first prong at the “germination” stage prevents the controller from using the conditions as a bargaining chip that can be “dangled in front of the Special Committee . . . as a substitution for a bare-knuckled contest over price. By the time Maxwell acceded to including a version of the majority-of-the-minority condition on December 15, it is reasonably conceivable that the deal had moved passed germination and onto economic horse trading.
The Committee on Foreign Investment in the United States (CFIUS) recently delivered its 2025 Annual Report to Congress. This Simpson Thacher memo reviews the report and shares these highlights:
– After several years of declining filing volumes, from a peak of approximately 440 filings in calendar year 2022 to 342 in 2023 and 325 in 2024, CFIUS received 347 total filings (notices and declarations combined) in calendar year 2025. This approximately 7% year-over-year increase represents the first uptick in annual filings since 2022 and reverses the downward trend that had characterized the prior three years.
– The Report notes that CFIUS operations were affected by lapses in government appropriations during 2025. Despite these funding disruptions, the Committee maintained its elevated review volumes and achieved a 67% initial clearance rate, similar to that of the prior year.
– The Report reaffirms CFIUS’s continued prioritization of enforcement and compliance monitoring. Calendar year 2025 marked the first full year in which the enhanced penalty regime (established in November 2024) was in effect. Treasury emphasized its ongoing enforcement of mandatory filing requirements, particularly for transactions involving critical technology, critical infrastructure, and sensitive personal data. In calendar year 2025, CFIUS conducted 40 compliance site visits and was actively monitoring 234 mitigation agreements. While the Report does not break out 2025 civil penalty information in the same level of detail, Treasury’s statements indicate that the elevated penalty ceiling and heightened enforcement posture remain firmly in place.
– Calendar year 2025 represented the first full year of operation under President Trump’s America First Investment Policy, issued in February 2025. The Report and accompanying press release confirm that this policy directive has continued to shape CFIUS’s approach, with an emphasis on streamlining reviews for investments from allied and partner nations and maintaining heightened scrutiny for investments from adversary nations.
The memo says, “Taken together, these trends signal a CFIUS regime that is simultaneously becoming more efficient for trusted allied investors and more aggressive toward transactions involving heightened risk to national security.” It highlights the Known Investor Pilot Program, which was launched in 2025, as one key way CFIUS is streamlining review for investments involving allied or partner countries.