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Breaking news and more: Your media center for shareholder activism and corporate governance.

In a deal backed by Elliott Management Corp., private-equity firm Silver Lake is investing $500 million in Symantec Corp. (SYMC) and has snagged a board seat at the cybersecurity firm. The move is a bid to bolster Symantec's stock, which has dwindled amid an otherwise profitable industry. Both Elliott and Silver Lake have won big in the past after helping revive stumbling technology companies. Symantec, known for its Norton antivirus software, plans to return $5.5 billion in capital to investors using the Silver Lake funds along with profits from a recent sale of its Veritas data-storage and recovery business. The company said the Silver Lake investment and significant cost cuts would help it refocus on its core cybersecurity business and better position the company for the final stages of its turnaround. Elliott reportedly has a large stake in Symantec and is one of its top shareholders.

Viacom (VIA) CEO Philippe Dauman has been appointed executive chairman of the entertainment company after 92-year-old Sumner Redstone resigned from the position.  The change comes one day after Redstone resigned as executive chairman of CBS to be named chairman emeritus of both Viacom and CBS.  "Redstone continues to control about 80 percent of the voting stock in the two companies through his National Amusements," notes the New York Times. "But in a period of 24 hours, he was formally removed from the operations of the huge entertainment conglomerate that he ruled with singular control for decades." Corporate governance at the companies has been the subject of investor scrutiny lately, prompted in part by a shareholder lawsuit claiming that Viacom and CBS board members were conflicted and put the interests of the Redstone family before those of the companies.

Ashford Hospitality Prime has characterized Sessa Capital's lawsuit as “yet another distracting tactic by one shareholder to prioritize its own short-term interests,” in the words of Ashford Chairman Monty Bennett. Sessa sued the REIT in a Maryland court Wednesday for breach of fiduciary duty, claiming its requirement of a termination fee if a majority of outside board directors were elected is excessive and invalid. The firm is also pressuring Ashford Prime to seek a buyer and has nominated five directors for its board. Bennett accused Sessa of not being aligned with the company's long-term stockholders and said it is “focused on generating a quick pop in their share price from a quick sale, regardless of whether it's a good time to do so.”

In a win for Red Mountain Capital Partners LLC on Thursday, iRobot Corp. (IRBT) announced it is selling its defense-related robot business.  The hedge fund has been pressuring iRobot since April to shed its defense business and focus on its more lucrative home cleaning business, which accounts for over 90% of sales.  The robot maker is selling its defense business to Washington, D.C.-based Arlington Capital Partners for up to $45 million.  Red Mountain owns a 6.1% stake in iRobot and welcomed the sale, though it still has concerns about corporate governance and returns on invested capital at iRobot.  Red Mountain has said it plans to nominate two candidates for the company's board at the next annual meeting.  iRobot also announced Thursday it would expand its share-repurchase plan by $65 million, which would allow the company to buy back as much as about 10% of the shares outstanding.

Edward Bramson of Sherborne Investors has raised his stake in British-based Electra Private Equity to 28.23%.  The investor has been slowly upping his stake and finally earned a board seat in November, after several failed attempts in previous months.  Bramson was voted onto the board by 53% of Electra shareholders, resulting in the resignation of then-chairman Roger Yates.  In October, Bramson criticized the company for a lack of board independence, chronic underperformance, and for ignoring his consistent suggestions to boost value.

Elliott Management Corp. on Thursday urged Bank of East Asia Ltd. to consider selling itself, the latest salvo in a drawn-out feud between the two entities. “Despite poor performance and poor corporate governance, the scale and profile of BEA'S banking platform is attractive to any potential acquirer which wants to expand its banking operations in Greater China,” Elliott declared. The hedge fund, which owns a 7% stake in Bank of East Asia, said it believes the bank could roughly triple its share value. Elliott also noted a recent change in a shareholding agreement in which Spain's CaixaBank no longer has to vote with Bank of East Asia's board on any outside offer. CaixaBank and its parent company “are now free to agree to an alternative sale of the BEA stake at a significantly higher price into a takeover offer, creating a win-win outcome not only for BEA'S shareholders but also for CaixaBank's shareholders,” Elliott said. The hedge fund has had an eye on the bank for more than a year.

Abstract News © Copyright 2016 INFORMATION, INC.

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Fink Backs New Breed of Shareholder Activism
" Financial Times (02/05/16) McLannahan, Ben"

BlackRock head Larry Fink in a letter to CEOs at leading companies in the United States and Europe urged them to listen to "activists who focus on long-term value creation" rather than investors seeking higher dividends or larger share buybacks. That sentiment is being echoed by a new breed of activists, who, like regulators, want companies to simplify. Hudson Executive Capital has invested in CIT Group (CIT), Lion Point Capital is circling Ally Financial (ALLY), and Paulson & Co. and Icahn Associates are both prodding at American International Group (AIG), but none of the activists is specifically calling for bigger cash returns. Instead, they're calling for the big financial services companies to streamline. The sentiment comes in the wake of regulatory and capital burdens imposed on "systemically important" financial institutions by the Federal Reserve.

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Sharp Shows Japan Inc. May Be More Open to Foreign Interest
" Reuters (02/05/16) Umekawa, Takashi; Emoto, Emi"

After recent urging from an activist investor to be more transparent about its decision process, Japan’s Sharp Corp. has chosen Taiwan’s Foxconn as its preferred suitor—which would result in the biggest foreign takeover of a Japanese tech company. Last week, Effissimo Capital Management sent the struggling electronics maker a letter asking it to explain how it would decide between two offers. Foxconn, known formally as Hon Hai, won out with a deal worth roughly $5.6 billion. According to sources, people close to Prime Minister Shinzo Abe approved of the idea that a Foxconn deal would help boost foreign direct investment, which is a growing priority in Japan. The country’s efforts to attract foreign investment likely influenced Sharp’s board in picking the foreign offer. "Sharp's decision to choose Hon Hai over a state-backed fund sent a message to foreign investors that it left the decision to the market," said Takatoshi Itoshima, chief portfolio manager at Commons Asset Management. "The move can boost investor confidence ... foreign investors may increasingly feel it's worth investing in the Japanese market."

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U.S. Banks Targeted by Activist Investors on Merger Wave Hopes
" Reuters (02/05/16) Flaherty, Michael; Stone, Mike"

Activist investors have tended to avoid banks in the past due to their size, complexity, and amount of regulatory scrutiny they attract; but the sector is growing increasingly attractive as certain factors are expected to drive more mergers. Last year saw 22 activist campaigns aimed at banks, up from just eight in 2009, based on Thomas Reuters Activism data. More recently, Hudson Executive Capital announced it had amassed a $56 million stake in Comerica Bank, a lender with $71 billion in assets under management. Some believe low interest rates, lagging returns on equity, and strict regulations will encourage banks to consolidate and that buyers will be willing to pay a significant multiple to a bank's tangible book value. Betting on banks is not without risk, but the potential profits are tempting—especially as bank deals have picked up just in the last year.

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Bank of America's Valuation Is Seen as Invitation for Activists
" Bloomberg (01/29/16) Son, Hugh"

Bank of America Corp. (BAC) has been raised from buy to sell by an analyst, who said in a research note Friday that the company’s low valuation and poor efficiency increase the likelihood of shareholders demanding a spinoff or other restructuring.  “With the stock trading at a significant discount to tangible book value, the chance for an event increases -- whether it's a restructuring, spinoff, or some sort of other action to improve their lousy efficiency,” wrote Mike Mayo, analyst at CLSA Ltd.  He added that although an activist is an outside shot, increased shareholder pressure is likely.  The company is trading below tangible book value which suggests investors either don't believe the firm's assets are worth what it says, or they doubt management's ability to generate returns above the cost of capital, said Mayo.  Bank of America's market capitalization is $142.5 billion, which would make it difficult for any hedge fund to take a sizable stake. Regulators also have ultimate control over whether banks can increase dividends and buybacks, which is another factor that makes the company less attractive for activists.

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Hunt or Be Hunted Is New Face of European Investor Activism
" Bloomberg (01/29/16) Webb, Alex; Andresen, Tino; Magnusson, Niklas"

Sweden's Cevian Capital and other European activists typically refrain from the public proxy fights employed by their American peers, but they do follow a similar pattern of amassing a sizable stake in a company and pressing for change -- privately at first but going public if necessary. Cevian has accumulated the second-largest stake in German industrial conglomerate Thyssenkrupp AG and Swiss engineering giant ABB Ltd., for example; and if executives fail to execute its demands, it will launch what insiders call “The Hunt.” This strategy entails turning investors against management in order to achieve certain objectives. Cevian's campaigns demonstrate how activism is changing European boardrooms: in the past two years, 56% of activist campaigns for board seats have been successful, up from a bit more than a third over the past 15 years, according to FTI Consulting.

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Abstract News © Copyright 2016 INFORMATION, INC.

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Company Search

Company SearchInsert a ticker and see updated financial quote summary, company description and detailed information on any live or recently exited activist campaigns, including the activist’s investment thesis. This feature takes you chronologically through the activist’s 13D filings detailing increases or decreases in holdings and change in average cost per share and summarizing any activist measures taken. Additionally, the chart at the bottom of the page shows the stock price performance and its reaction to each 13D filing. For quick reference, there are links to the activist’s profile and returns history and any letters and agreements the activist has entered into in connection with this investment.

Activist Profile

Activist Profile View a detailed analysis of the activist histories of the 40+ top activists – updated and expanded on a continuous basis. Get detailed analysis on: (i) the returns for each activist investor, including: (A) which activists have outperformed the S&P500 on their individual and aggregated 13D filings, (B) how their returns on live filings compare to their returns on exited filings, and (C) how their returns on filings change when they take significant activist measures; (ii) the average holding periods for each activist investor on all filings, exited filings, live filings and filings where they have taken significant activist measures; and (iii) what activist measures were taken, when they were taken and how the underlying stock reacted to the filing.

This month’s Activist Report: Featured Article

2015 Year-End Activist Statistics

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Search live and exited filings by Investor, Dates, Market Caps, Industry and Type of Activism (i.e., Proxy fights for board seats, Posion pill issues, Spinoff, etc.). Sort results by date, investors, return on investment, etc. Easy access to link to detailed analysis of activist campaign and any letters or agreements entered into in connection therewith.

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Search FilingsSearch our list of historical 13D Monitor filings. The list contains approximately 4.000 material filings since 2006 and also includes the associated report.

Activist Letters and Agreements

Search our library of activist letters and agreements to find letters sent by activists to Companies, Settlement Agreements, Standstill Agreements, etc. Search this library by filer, company, type of letter or agreement, or any combination thereof.

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