13D MONITOR ACTIVIST MEDIA CENTER
Breaking news and more: Your media center for shareholder activism and corporate governance.
Abstract News © Copyright 2016 INFORMATION, INC.
Abenomics' Third Arrow Spurs Dan Loeb and Others to Shake Up Japan
" Institutional Investor (08/22/16) Delaney, Jess"
Foreign shareholder activists have for decades found little success in Japan but, partially due to the corporate governance reforms of Prime Minister Shinzo Abe, they now are experiencing unprecedented success. Third Point founder and CEO Dan Loeb, for example, has been campaigning for greater shareholder returns in Japan since 2013 and has acquired holdings in robot maker Fanuc Corp., Suzuki Motor Corp., IHI Corp., and Sony Corp. “We effectively give them a dare-to-be-great speech that connects them to the principles around governance that their own government has articulated as part of the third arrow strategy,” Loeb says. “It's subtle, but I think it's more palatable because the companies don't have to do something that an outsider wants them to do; they are following the leadership of their own government.” Abe's reforms aim to drive greater corporate discipline and push boards to show more concern for shareholders, and Japan is starting to mend its ways. In October 2015, Loeb announced the hedge fund firm had taken a stake in Seven & i Holdings Co. and ultimately scored a rare victory after invoking the corporate governance code in an open letter to the board. The success was hailed in the Japanese media as the beginning of a new era in corporate governance.
In Praise of Hedge Funds: Why Short-Term Activists Create Long-Term Value
" City A.M. (08/16/16) Edmans, Alex"
Activist hedge funds often get a bum rap, but academic research examines "all the evidence" and presents a more positive view, writes Alex Edmans, a professor of finance at London Business School. A decade of research led by professors at Duke University and Columbia University shows that activist hedge funds create value in both the short term and in the long run. The pivotal study found that activism boosts company value 7%, with no long-term reversal, while also improving operating performance and payout to investors. CEO turnover also rises. A second paper investigated the source of the increase in operating performance. It found that productivity climbs in plants sold by hedge funds, suggesting that they drive reallocation of assets to buyers that can make better use of them. The professors' newest paper studies innovation, finding that hedge funds do cut R&D. However, despite lower innovation input, it actually improves in terms of both the number and quality of future patents, the authors found. Ultimately, "investment is absolutely critical for the twenty-first century firm," Edmans concludes.
Activist Investors Are Buying Into Old Media Companies
" CNBC (08/15/16) Marino, Jon"
Jana Partners announced a new holding in Time Inc. (TIME), sending the media company's stock up 5% in early trading on Monday. Activist investors may take a greater interest in media companies going forward, according to some observers. "Undervalued and out-of-favor media stocks where the underlying assets have intrinsic value are becoming more attractive candidates for activists," explains Steven Wolosky, a partner at Olshan Frome Wolosky in New York. In June, HG Vora Capital Management purchased 2 million shares in Tribune Publishing, or Tronc (TRNC). In 2014, Carl Icahn engaged Gannett Publishing (GCI), which split its print and television businesses soon after the investor took his stake. One observer predicts activist hedge fund investors may engage related businesses, such as television network operators.
Brexit Vote Creates Buying Opportunity for Activist Investors
" Bloomberg (08/16/16) Hellier, David"
The United Kingdom may become a magnet for activist investors following its June vote to withdraw from the European Union. Since the referendum, funds that push for changes in corporate strategy or seek board seats have stepped up their presence at an increasing number of London-listed companies, including brewer SABMiller Plc, bookmaker William Hill Plc, and TV and film distributor Entertainment One Ltd. Funds such as Livermore Partners Inc. and Crystal Amber Fund Ltd. say the Brexit vote has opened up opportunities by driving down the pound and the share prices of some companies. “We like U.K. assets,” said David Neuhauser, managing director of Livermore Partners. He noted that the depreciation of sterling has made U.K. valuations look “extremely compelling.” Research firm Activist Insight counted six new campaigns involving U.K. companies since June 30, bringing the total for the year to 30—four more than in all of 2015. Jan Weber, who oversees shareholder activism in Europe at Morgan Stanley, said the rise in investor campaigns began before the Brexit vote; but the referendum appears to have given it a boost. “We feared we might see a halt to this growth in the U.K., but that doesn't seem to be the case,” he said. “U.S. activists are looking through Brexit.”
Abstract News © Copyright 2016 INFORMATION, INC.
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Last month’s Activist Report
||Activist investors targeting Time Inc.?
Source: CNBC Video - August 16, 2016
||Misunderstood activist investors?
Source: CNBC Video - May 19, 2016
||Betting on Zero: Bill Ackman vs. Herbalife
Source: CNBC Video - April 15, 2016
||No Joy for Hedge Funds in 2015
Source: Bloomberg TV - December 23, 2015
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