A Lazard report summarizes shareholder activism during the first half of 2018. Here are some of the highlights:
– In H1 2019, 107 new campaigns targeted 99 companies, down ~25% relative to H1 2018 but in line with the elevated multi-year trend.
– Top 10 activists increased their cumulative capital deployed in public activist positions (new and existing) from $75.5bn at the end of Q1 2019 to $82.2bn at the end of H1 2019.
– Starboard’s 10 new campaigns, including three new campaigns in Q2 2019, made them the most prolific activist in H1 2019. Elliott remains the leading activist in terms of capital deployed, with $3.4bn of new capital deployed in H1 2019 and a total of $17.4bn deployed in new and existing activist positions
– 46% of all activist campaigns in H1 2019 had an M&A thesis, as activists continue to see transactions as opportunities to generate alpha − Comparatively, from 2014-2018, M&A-related objectives arose in only one-third of all campaigns.
– Activists won 81 Board seats in H1 2019, 91% of which came from settlements. Of the 19 campaigns that went to a final vote in H1 2019, 15 were against non-U.S. targets and activists prevailed in only three situations.
– The record 14 long slates nominated in H1 2019 yielded 28 seats out of the 99 seats initially contested, with two of the long slate campaigns still ongoing.
Lazard also points out that active managers are no longer waiting for a shareholder vote to express their concerns. In contested situations, they are going public with their views corporate strategy and M&A. In some cases, active managers are choosing to act as the activist themselves – even nominating Board slates (e.g., Neuberger Berman at Verint, M&G at Methanex).
–John Jenkins, DealLawyers.com August 6, 2019