Why Is This Man Eyeing Taubman Centers?
" Crain's Detroit Business (11/19/17) Pinho, Kirk"
Paul Singer's Elliott Management Corp. has acquired a 3.8% stake in Taubman Centers Inc. (TCO). The luxury mall giant will battle the New York hedge fund at the same time it faces pressure from Connecticut-based investor Jonathan Litt. Observers believe Elliott will seek changes that could include taking Taubman private or a sale. Some believe the hedge fund could even push out the company's founding family. "Singer doesn't care if you hate him," says professor Erik Gordon of the University of Michigan's Stephen M. Ross School of Business. "His goal is to push companies, and even countries, into making changes that create wealth. That's it." Oakland University School of Business Administration dean Michael Mazzeo says it is telling that Elliott disclosed its stake when it was not legally obligated to, as it falls below the 5% threshold. "They are signaling that they are in play," he says. "While it's not really clear what they are seeking at Taubman, since there are two competing aggressors in this case, that would suggest that this company is undervalued. They may be taken over and then split apart, or they may keep what's good and sell what's bad." Sudip Datta of Wayne State University's Mike Ilitch School of Business, adds, "When a company comes in the crosshairs of Elliott and Paul Singer, that company most likely will succumb to Elliott." Meanwhile, Gordon believe's Taubman's inability to shake Litt has made the ground fertile for Elliott, and he speculates that Elliott, within a year or two, will have radically altered Taubman's board and forced the family to sell off a substantial portion of its ownership stake.
New Canadian Alliance Created to Achieve Gender Parity on Boards
" Women's Post (11/18/17)"
A new alliance has been formed to help foster gender parity on Canadian corporate boards. The Canadian Gender and Good Governance Alliance (CGGGA) comprises seven Canadian organizations dedicated to pushing forward gender equality in the workplace, especially in boardrooms. Despite decades of advocacy, females are still outnumbered in senior executive roles, especially within financial services. Women hold approximately 14% of all board seats, and only 26% of open board positions are filled by women applicants. A McKinsey & Co. study last year showed that just 6% of Canadian CEOs are women. The CGGGA comprises Women in Capital Markets, the 30% Club Canada, Catalyst Canada, the Business Council of Canada, the Institute of Corporate Directors, the Canadian Coalition for Good Governance, and the Clarkson Centre. This is the first such coalition in North America.
GAMCO Trying to Get on Scripps Board
" Cincinnati Business Courier (11/16/17) Watkins, Steve"
Mario Gabelli has upped his stake in E.W. Scripps Co. (SSP) and intends to pursue board representation, he revealed in a Securities and Exchange Commission (SEC) filing last month. Gabelli's GAMCO Investors Inc. (GBL) owns 11.3 million, or 16.1%, of Class A shares of Scripps, according to regulatory filings. Scripps also has a voting class of shares that is 93% controlled by members of the Scripps family. GAMCO—which manages $43 billion in assets—said in the SEC filing that it "intends on moving forward with the submission of nominations of up to three individuals for election" to Scripps' board. It said it will nominate directors at a future point in time. Of Scripps' 11 directors, eight are elected by the holders of voting shares—meaning the Scripps family essentially determines those board members. The other three are elected by the Class A shareholders, and those are the seats Gabelli is seeking at the annual shareholders meeting next spring. Scripps spokeswoman Carolyn Micheli said company officials have met with Gabelli but there has not been any effort to adjust strategies. "We have had a lot of conversations with him," she said. "We talk to Mr. Gabelli and many of our shareholders on a regular basis." Some of those conversations have revolved around Scripps' Oct. 2 acquisition of Katz Networks, she said. That involved four national networks—Bounce, Escape, Grit, and Laff—that reach about 90% of U.S. households. Scripps, whose stock is down 25% this year, is one of the biggest independent TV station owners in the country.
Korn Ferry Study Finds Hispanic Representation on Large Corporate Boards Remains Extremely Low, but There Are Signs of Improvement
" Korn Ferry News Release (11/16/17)"
A new analysis by Korn Ferry (KFY) shows that while there are still very few Hispanics on large corporate boards, there are signs of improvement. The study finds that the percentage of Hispanics on Fortune 500 Boards has remained stagnant since 2015, with 2.6% of board members being Hispanic as of summer 2017, and 2.5% at the end of 2015. Three-quarters of Fortune 500 companies have no Hispanic board members. The numbers are even lower when analyzing the Fortune 1000, with the number of Hispanic board members remaining at 2.1% since 2015. More than 82% of Fortune 1000 companies still have no Hispanic board members. Despite the lack of overall growth of Hispanic representation, the study did find some bright spots. The percentage of Hispanic women board members at Fortune 500 companies has increased 19% since 2015, from 29 to 35 women. The Fortune 1000 has seen a 15% increase, from 52 Hispanic women board members to 60. The study uncovered strong trends toward increasing the percentage of Hispanic board representation in the future. In 2016 and the first half of 2017, there were 27 Latinos elected to new seats—67% of whom were first-time directors. Similarly, in the Fortune 1000, there were 39 Hispanics elected to new seats, with 62% being first-time directors.
How Not to Handle Investors: A Lesson From London
" Wall Street Journal (11/15/17) Davies, Paul J."
In the two weeks since a shareholder first agitated the London Stock Exchange Group (LSE) over its reasons for removing CEO Xavier Rolet, the company has only further dug itself into a hole. Chris Hohn's the Children's Investment Fund (TCI) has been asking the exchange to reveal the reasons behind Rolet's planned exit. However, LSE Group has only issued brief statements on process and has evaded the core question. Now, LSE Chairman Donald Brydon faces a vote to oust him instead of Rolet at a shareholder meeting requisitioned by TCI, which owns a 5% stake. On Wednesday, TCI sent a third letter to Brydon demanding he answer questions ahead of the meeting, including why Rolet was "dismissed" and whether he is getting conditional severance payments. The LSE refuses to confirm or deny any of this, which is unusual because a simple statement from Rolet that he wants to retire would settle the matter. Rolet did this once before: when the LSE was trying to merge earlier this year with Deutsche Börse, the rival German stock exchange, Rolet said he would happily retire to his winemaking hobbies once the deal was finalized. The merger fell apart in March and Rolet postponed retirement. That decision could still fit with the LSE's announcement that it was searching for a new CEO, but the situation has grown suspicious due to the LSE's refusal to engage TCI's questions. If there has been an internal fight over strategy, or Rolet is being blamed for the merger's failure, this will ultimately come to light. Brydon's decision to face a vote of no confidence without any explanation is risky and creates further instability for investors ahead of the shareholder meeting.
Roark Acquisition Could Be Win-Win for Buffalo Wild Wings and Marcato
" CNBC (11/14/17) Whitten, Sarah"
Marcato Capital could push for a higher bid for Buffalo Wild Wings (BWLD), according to analysts. Roark Capital reportedly has made an offer of more than $150 per share for the company, or more than $2.3 billion, catapulting the stock as much as 27% Tuesday. The proposed deal is roughly a multiple of 10 times the company's EBITDA—just below the average multiple for U.S. restaurant deals over $10 million, which is 11 times EBITDA, according to Dealogic. "We believe the greatest hurdle could be Marcato and its board seats; the majority of its stake was acquired in 2Q16 at $140-$150 with the thesis that shares could be worth $400," BTIG analyst Peter Saleh wrote in a research note Tuesday. Marcato, which began acquiring a stake in Buffalo Wild Wings last year, secured three of the four board seats it was seeking after a proxy fight. However, the hedge fund is unlikely to gain much from a deal with Roark at its current price. It first started purchasing Buffalo Wild Wings shares in July 2016, when the stock was about $143 a share. Ahead of the proxy battle, Marcato owned 9.9% of Buffalo Wild Wings' outstanding shares; as of Aug. 1, the investor lowered its stake to about 6.4%, according to FactSet. Jim Badum, executive vice president of client partnerships at Ansira, suggested other firms could begin offering rival bids for the company. He also anticipates that Marcato will seek to get a higher premium for the shares. "The acquisition could ... provide an attractive exit for Marcato Capital," said Stifel analyst Chris O'Cull.
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