I don’t think it will come as a surprise to many public companies to learn that their investors are becoming more open to listening to pitches from activist shareholders, but IR Magazine’s report may still raise some eyebrows with its conclusions about just how willing they are to hear activists out:
Almost two thirds of investors say they are open to talking to activist investors about a company they have a position in, according to recent research from IR Magazine. While many companies continue to experience volatile share prices and balance sheet concerns – with a significant increase in the number of companies adopting poison pills this year – investors are more likely to support an activist campaign now than they were three years ago.
This is according to IR Magazine’s Shareholder Activism research report, which was released last month. Almost two fifths (39 percent) of investor respondents say they are more likely to support an activist campaign than they were three years ago, with almost half of European and Asian respondents agreeing with this statement.
The silver lining for company boards and management is that the number of investors siding with activist investors remains relatively low. The report says that only 22% of buy-side respondents have been involved in an activist campaign since 2017, with 5% leading the campaign and 17% supporting or partnering with an activist investor.
-John Jenkins, DealLawyers.com July 10, 2020