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

Depomed (DEPO), which is being engaged by Starboard Value, has suggested holding a meeting called by its board on Oct. 28, which would be after the conclusion of patent litigation regarding the drug Nucynta. Doing so would allow shareholders to have all the information they need about the pharmaceutical firm's "most important asset" to make an "informed voting decision," Depomed stated, adding that it hopes to "work collaboratively" with Starboard. Starboard called for the meeting last month, and it has warned the company about taking any actions that would thwart shareholders' efforts to make changes. If Starboard objects to the Oct. 28 date, procedural matters that need to be addressed prior to any meeting would mean a meeting would happen sometime between Sept. 24 and Nov. 17. Starboard owns close to 10% of Depomed's shares.

Xerox (XRX) has named Jeff Jacobson, president of Xerox Technology, to head the company after it splits in two. Ashok Vemuri—former CEO of solutions provider iGate—will head the business process outsourcing business, to be named Conduent. Xerox and Conduent both will be publicly owned companies. Current Xerox CEO Ursula Burns will step down when the company splits; and she will serve as chairman of the new Xerox, the unit Jacobson will head. Late last year, Carl Icahn disclosed that he had purchased approximately 7% of Xerox stock.

Bank of America (BAC) has added a new director, Michael White, to its board. White is the retired CEO of DirecTV and currently serves as an advisory partner at Trian Fund Management. Trian, however, does not have a holding in Bank of America, according to a recent securities filing. In his capacity as an advisory partner at Trian, White helps the company ferret out possible investments, craft strategy, and engage with management teams at public companies.

Macy's Inc. (M) says Terry Lundgren will step down as CEO in the first quarter of 2017. He will be succeeded by former chief merchandising officer Jeff Gennette. The retailer's shares rose by 5 percent on the news. The retailer has been struggling and has been engaged by Starboard Value LP. Investors are hopeful the change in leadership will help the company turn around its flagging performance. Macy's is also in talks for partnerships or joint ventures for its flagship and mall-based locations. "We think a new perspective and leadership could be invigorating," stated Morningstar analyst Bridget Weishaar in a client note.

Bill Ackman has intensified his engagement with Herbalife (HLF), releasing video excerpts geared toward proving some of the company's top producers continue to make "false and misleading claims about its fraudulent business opportunity." The move is part of Ackman's $1 billion short bet against Herbalife, which he claims uses a pyramid scheme as its business model. Meanwhile, the company has been facing an ongoing probe by the Federal Trade Commission—which has been looking into whether the company complies with laws on advertising, marketing, and sales of business opportunities. The video excerpts, compiled and edited by Ackman's Pershing Square Capital Management, depict three top Herbalife producers saying that the company "makes dreams come true" and can "make you rich." Intercut with the videos, Pershing Square added statements countering that "99% of Herbalife distributors earn less than minimum wage from the company" and "distributors at the bottom of the pyramid lose their savings to make the dreams of the top 0.1% come true." Herbalife has vigorously defended itself.

Companies are settling quickly with shareholder activists in many instances, suggesting that activists hold the upper hand in negotiations. Qlik Technologies Inc. (QLIK) is a recent example. The software company in March agreed to settle with Elliott Management Corp. after only eight days of discussions. Corporations "think it's more prudent to settle than to go through the distraction and expense of a proxy fight they're likely to lose anyway," says Marc Weingarten, a partner at Schulte Roth & Zabel LLP. "It is the new normal, at least for now," said one unnamed in-house counsel for an energy company. "I think the average time it takes to settle will continue to shorten. Giving up seats for some peace sometimes is the only viable option."

Abstract News © Copyright 2016 INFORMATION, INC.

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Aligning Board Talent With Strategy a Key Challenge
" PRNewswire (06/21/16)"

A new global survey by KPMG's Board Leadership Center found that roughly 75 percent of corporate directors say they face a critical challenge aligning board talent with the company's long-term strategy. Furthermore, about three in five want greater diversity and viewpoints on the board. Survey respondents also identified significant barriers to refining the board's makeup, with issues ranging from the right mix of skills and overcoming "status quo" thinking to lack of formal succession plans. KPMG polled over 2,300 board members and executives in 46 countries to better understand how directors are thinking about the mix of skills, backgrounds, experiences, and perspectives in the boardroom. The barrier most frequently cited by respondents to building a high-performing board was "finding directors with both general business experience and specific expertise needed by the company" (69 percent), followed by identifying the board's future talent needs (55 percent).

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Activists' Battles With Companies Played Out in the Classroom
" Financial Times (06/20/16) Walker, Owen"

Columbia University, Duke University's Fuqua School of Business, and other schools are offering classes about activist investing. Among the topics discussed are activist history, hedge fund strategies, and controversies related to those strategies. Starboard Value's Jeffrey Smith spoke to the Columbia class. Attorneys and investment bankers who help companies defend themselves against activist campaigns also have been among the speakers. The majority of students who take the Columbia course are not interested in becoming activists. Instead, they believe the jobs they eventually take will require them to defend against activists.

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Icahn, Paulson Add Transparency, AIG President Says
" Reuters (06/15/16) Cohn, Carolyn"

American International Group (AIG) President and CEO Peter Hancock said on Wednesday that Carl Icahn and John Paulson are increasing transparency at the U.S. insurer through their representation on its board. Paulson and Samuel Merksamer, a managing director at Icahn Capital, joined AIG's board last month after Icahn campaigned last year for the company to split itself into three. AIG rebuffed Icahn's proposal in January in favor of its own strategy, which entailed spinning off its mortgage insurance unit and selling its broker-dealer network. “Inclusion of the activists has forced us to be a little bit more transparent,” Hancock conceded at a briefing in London, adding that after seeing the company from the inside, the investors were gaining better understanding of the hurdles to simplifying the company. He said part of that process would include cutting motor insurance business in some of the countries in which it operates, following a decision to pull out of motor insurance in China. Icahn, AIG's fourth-largest investor, has argued that a split would help AIG relieve itself of the regulatory burden of being a "systemically important financial institution," which demands higher capital cushions.

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A New Status Quo for the Boardroom
" Wall Street Journal (06/15/16) Garden, Ed"

In an opinion piece, Ed Garden, chief investment officer of Trian Fund Management, says shareholders are growing less passive for a number of reasons.  First, institutional shareholders have gotten larger, and their ownership of corporate America has become more concentrated.  Second, many of these institutional shareholders have developed deep industry expertise.  In addition, poor performance by management and outright abuse of power has created a mindset among shareholders that management teams have lost their right to be left alone.  Lastly, there are a few investors—commonly known as “activists” but whom Garden calls “highly engaged shareowners”—who are rousing shareholder support and providing the catalyst for management to be held accountable.  Critics have accused activists of pursuing a short-term bump in stock prices, and some politicians claim they lead to short-termism, rising inequality, and low pay for workers.  “But in my view,” Garden writes, “the management and directors of public companies, not the shareholders, have driven such short-term behavior, and the way to build strong companies and create jobs is not through government mandate or protecting weak management teams.”  Instead, it will occur because market forces will reward the companies in which management teams and highly engaged shareowners work together to achieve sustained, lasting growth, Garden says.

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Companies Using Deals With Activists to Protect Directors
" Bloomberg BNA (06/15/16) Odom, Che"

Companies may be settling with activist shareholders and handing them board seats more quickly in part because it helps ensconce the company's directors. According to a review by Bloomberg BNA, common provisions in recent settlement agreements include restricting the activist from acquiring or transferring shares for a set time, requiring the activist's board representative to vote for proposals, and preventing the activist and its nominee from making public remarks about the company. While the company makes concessions to the activist, the settlement's defensive clauses help it to secure the position of remaining board members and get the activist's director nominee to vote with them. Some companies are taking the opportunity to “load up a proposed settlement agreement with every defensive feature that can be found,” said Derek Bork, a partner and corporate attorney at Thompson Hine LLP. “Attempts by companies to overreach in settlement agreements have been around as long as activism,” Bork told Bloomberg BNA. “I believe the trend is growing as more companies and their legal advisers become more aware of the defensive devices that are being used in the market.” Bork warned that the restrictive clauses could be viewed as board entrenchment devices, and courts and proxy advisers may take an unfavorable view of such arrangements.

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SEC Change of Proxy Rules Opened Door to Activists
" Business Insider (06/14/16) Wadhwa, Tina"

Shareholder activism can be expensive—with Nelson Peltz, for example, spending a reported $8 million on the campaign at DuPont (DD) a few years ago. Despite the cost, activists have continued to wage battles—largely because the Securities and Exchange Commission has made changes to facilitate shareholder challenges against company boards. These changes "have been grabbed onto and used by activist hedge funds," said Lynn Stout, author and professor of corporate and business law at Cornell Law School. Activist investors ended 2015 with $174 billion under management, up from just $56 billion in 2010. In addition to SEC actions that benefit active shareholders, federal changes in the tax code also now require companies to tie executive pay to metrics like share price—which, in turn, drives CEOs to prioritize making money.

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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.

Search Activist Campaigns

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.

Search 13D Monitor Archive

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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