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Procter & Gamble (PG) reported robust quarterly results that beat Wall Street's expectations, but Nelson Peltz was largely unimpressed. Peltz's Trian Fund Management has a $3.3 billion stake in the company, is seeking a board seat, and has argued that the consumer goods giant hasn't done enough to benefit from a five-year cost cutting. He remains skeptical of the $10 billion savings plan announced last year and has criticized the company's ability to move quickly as its industry changes. Furthermore, he says P&G's returns to shareholders are below that of peers. "Trian believes P&G needs to address the root causes of this consistent underperformance, including deteriorating market share across most of its categories and excessive cost and bureaucracy," he said in a statement on July 27. Peltz noted that he is seeking to change P&G's "insular culture." P&G CEO David Taylor says the company is on the right path and must stay that course. Taylor says there is no need for Peltz to join the board. "The fact that he has good advice doesn't mean we just add him to the board," Taylor says.

Two investors who were troubled by French Connection's corporate governance have sold their stakes to Sports Direct, giving the sportswear giant 27% of the fashion retailer. Gatemore had held an 8% stake in French Connection, while OTK had owned a 7% stake. The two had joined forces to advocate changes at French Connection. They wanted founder Stephen Marks to step down and consider a sale process, but Marks has refused to relinquish his dual chairman and CEO role, contrary to U.K. corporate governance protocols. Sports Direct in February purchased an 11% stake in French Connection, but the addition of Gatemore and OTK's shares brings the business closer to the United Kingdom's 30% threshold to launch a takeover. Gatemore said it had decided to sell out of French Connection because it was dissatisfied with the rate of change at FCUK and had "decided not to ride out the investment during this period of uncertainty in the U.K. retail market." Liad Meidar, managing partner of Gatemore Capital Management, said that, "French Connection could have unlocked significantly more value during the period had it made more progress in fixing its corporate governance. ... French Connection remains a glaring example of the shortcomings of the U.K. Corporate Governance Code: namely, that companies can get away with such violations with zero repercussions to the people at the top."

Wealth manager Alliance Trust says its "transformational" revamp is paying off, citing returns that outperformed its benchmark during the first half of 2017. The firm, which last year agreed to sell its in-house investment arm to Liontrust Asset Management, said it delivered a total shareholder return of 10.8% for the six months through June, compared to a 6.4% increase for the MSCI All Country World Index. Alliance Trust last year saw a Rothschild-linked investment company walk away from talks over a potential £5 billion merger, having previously come under pressure from Elliott in a move that led to two of its suggested non-executives appointed to the board. Elliott's engagement also led to the departure of CEO Katherine Garrett-Cox and Chairwoman Karin Forseke. Alliance Trust Chairman Lord Smith of Kelvin said, "We are confident that the trust will deliver attractive returns for our shareholders over the long term under the new approach, and are grateful to our shareholders for their support."

Land & Buildings Investment Management LLC has issued a press release commenting on Taubman Centers Inc.'s (TCO) announcement regarding updates to its corporate governance, specifically, Taubman's promised board refreshment and declassification commitments. Land & Buildings stated: "Given that these announced changes only came about as a result of Land and Buildings running a special meeting solicitation to ensure a shareholder-friendly board de-staggering and refreshment, we must continue to question Taubman's commitment to best-in-class corporate governance. Further, the governance changes fall short of what is needed, as only three directors will stand for election in 2018, and it will now take three full years to de-stagger the Board. We believe it is in shareholders' best interests that the declassification of the Board take place immediately and that the directors recently elected at the 2017 Annual Meeting, who we believe were elected only as a result of Taubman's eleventh hour governance promises, voluntarily agree to stand for re-election at the 2018 Annual Meeting, together with the directors elected in 2015."

FTSE Russell announced Wednesday it planned to exclude Snap Inc. (SNAP) from its widely followed stock indexes, in a rebuke of the company's unusual share structure that denies voting rights to investors. The stock index provider said it made the decision based on client feedback, the latest sign of the growing importance of corporate governance rights to shareholders even as tech companies move to concentrate power with insiders. It intends to require new constituents of its indexes to have at least 5% of their voting rights in the hands of public shareholders, though current constituents will be given a five-year grace period to comply. FTSE Russell CEO Mark Makepeace said many of his clients worried that Snap's structure could set a bad precedent. "There were strong opinions that voting rights are an important issue. For shareholders to perform their function they have to be able to influence a company," he told Reuters in an interview. "Shareholders won't be able to hold boards accountable if they don't have voting rights." The Council of Institutional Investors, whose members include big pension funds critical of Snap's structure, applauded FTSE Russell's decision and said it could encourage other index providers to take similar steps. "FTSE Russell's decision is a rebuke to companies that would deny public shareholders any voice in company matters," said the group's executive director, Ken Bertsch.

Elliott Advisors is continuing its efforts to oust Akzo Nobel Chairman Antony Burgmans, despite the company's announcement Tuesday that the 70-year-old would step down at the end of his term in April.  This is not soon enough for the hedge fund, which returned to court Thursday in a bid to unseat Burgmans over his rejection of a €26.3 billion ($30 billion) takeover proposal from PPG Industries (PPG).  Elliott has been immersed in an increasingly bitter fight against Burgmans, blaming him for financial underperformance and causing a "crisis of confidence" among Akzo shareholders.  Elliott lawyer Jan-Willem de Groot cited broad investor support for the demands.  "Almost the entire top 20 of Akzo shareholders, representing total investments of more than 6 billion euros, have been urging a meeting for months," he said, naming British pension scheme investor USS, Franklin Templeton, and Dodge & Cox.  The Dutch paints group and its U.S. rival are in a six-month compulsory cooling off period that expires in December.  Some analysts believe the departure of the two leading opponents of a deal—including CEO Ton Buechner, who resigned on July 19 due to health reasons—could open the door for talks.  Elliott is Akzo's largest investor, with a 9.5% stake.

Clariant CEO Hariolf Kottmann on Thursday sought to squelch opposition from White Tale Holdings to a planned $20 billion merger with Huntsman Corp. (HUN), declaring that most large shareholders are open to the deal.  "We've spoken to our top 20 investors—who represent more than 50% of our share capital—multiple times," Kottmann said in an interview with Reuters.  "We didn't experience a single investor who rejected the deal."  Clariant also said the merger was set to close late this year or early in 2018 despite opposition from White Tale Holdings, which this month boosted its stake in the Swiss chemicals maker to more than 10%.  Kottmann noted Clariant could potentially divest one-quarter of its portfolio, including its Pigments and Masterbatches businesses following the deal.  The group also expects the negative impact from raw materials costs to ease up in the second half of the year as price hikes kick in, mitigating margin pressure from certain oil-derived inputs, CFO Patrick Jany said.

McKesson Corp. (MCK) shareholders have voted against the company's executive pay policy in light of a shareholder campaign that criticized the company for its role in the U.S. opioid drug epidemic. The International Brotherhood of Teamsters and three U.S. state treasurers opposed the drug wholesaler's executive compensation practices, urging it to appoint an independent chairman. McKesson CEO John Hammergren was paid over $20 million for the year ended March 31, despite a $150 million settlement paid to resolve a U.S. probe into whether the company failed to report suspicious orders of addictive painkillers.  A company statement Wednesday read: "The Compensation Committee will conduct a thorough review of the current executive compensation plan and consider implementing changes that further drive alignment between incentives and shareholder value."  McKesson also announced it would split the role of chairman and CEO in the future, commencing with its next chief executive.

Nestlé said Thursday that sales fell slightly during the first half of the year and an important growth benchmark missed market expectations, boosting pressure on the packaged foods behemoth to identify strategies to increase profitability and appease frustrated shareholders.  Organic growth came in at just 2.3%, below analyst projections for 2.7% growth.  The results highlight the challenges facing CEO Mark Schneider, who took over in January and quickly scrapped a longstanding target for annual organic growth of 5% to 6%, which Nestlé has missed four years in a row.  In June, Daniel Loeb's Third Point LLC disclosed a 1.25% stake and called for changes, including the sale of non-core assets such as Nestlé's stake in L'Oréal.  Days later, Nestlé announced a 20 billion Swiss franc ($21 billion) share buyback program and said it would focus its capital spending on high-growth areas of its business, including coffee and bottled water.  In a sign of Nestlé's troubling environment, the company reported first-half revenue of 43 billion francs on Thursday, compared with 43.2 billion francs in the same period of 2016, slightly below analysts' expectations of 43.8 billion francs.  Net profit came in at 4.9 billion francs, up 19% on the year, although the increase was partly due to a one-off tax adjustment last year.  Analysts had expected profit at 4.8 billion francs.  Analysts at Baader Helvea Equity Research said the results could raise pressure on Nestlé to make changes and said new steps could be revealed at the company's Capital Markets Day in September.

Cost reductions helped Procter & Gamble Co. (PG) to report another quarter of market-beating profit.  The company also forecast full-year profit above estimates.  The good news comes amid growing pressure from investors—including Nelson Peltz of Trian Fund Management LP—to bolster the stock price and sales, which have lagged those of peers such as Unilever Plc (UN).  While P&G's organic sales increased 2% in the latest quarter, Unilever's were up 3%.  P&G's shares, 6% higher this year, have also straggled the S&P 500.  "While P&G says it is addressing the underperformance issue, shareholders have heard similar promises in the past and results have not materially improved," remarked Peltz, who has a $3.3 billion holding in P&G and is pursuing a board seat.  P&G's net sales were unchanged at $16.08 billion in the quarter.  The company has focused on slashing costs as overall sales have remained stagnant.  Continuing cost-cutting efforts are expected to drive a 5% to 7% growth in full-year adjusted profit, which translates to $4.12 to $4.19 per share.  Analysts on average are expecting $4.11 per share, according to Thomson Reuters I/B/E/S.

Nelson Peltz's Trian Fund Management has made approximately $180 million so far from its 1.5% stake in Procter & Gamble (PG). Peltz paid about $84.33 per share for 37.6 million shares, based on the transactions described in proxy filings. That equates to a 5.7% return on his investment as of July 25, when P&G's stock closed at $89.14. Trian is attempting to leverage its stake in order to put Peltz on the company's board. Trian took its case public to shareholders after being spurned by the 11-member board. Investors appear more and more confident Peltz may prompt executives at the consumer products company to find a way to boost growth at the company, which has struggled to increase profits and sales in recent years. P&G plans to release its 2017 fiscal year results on July 27, and at that time, CEO David Taylor and executives are expected to discuss Peltz's bid and the company's turnaround progress.

Securities and Exchange Commission (SEC) Chairman Jay Clayton on Wednesday identified some issues he wants to address, including the rise of shareholder proposals and the clout proxy advisory firms wield over corporate governance. He did not offer specifics on any potential changes. In an appearance at the U.S. Chamber of Commerce, Clayton asked whether the "idiosyncratic interests" of a few shareholders should lead to greater costs for the "ordinary shareholder" and said the SEC was investigating the "fair amount of influence" the proxy advisory firms have. The Chamber has previously called for reforms to rules governing shareholder proposals and the role proxy advisors play in corporate elections. Activist investors have resisted some of the Chamber's recommendations, saying the process is working and citing the willingness of large asset managers to support proposals once considered distractions. In May, BlackRock Inc. (BLK) backed a measure urging Exxon Mobil Corp. (XOM) to report on risks it faces from climate change, for example. Other issues Clayton discussed included the Labor Department's so-called "fiduciary rule," which aims to reduce conflicts of interest among brokers offering advice on retirement investments.

Starboard Value LP revealed a 4.9% stake in ComScore Inc. and filed a lawsuit Tuesday in Delaware to force it to convene an annual general meeting.  Starboard wants a session in order to elect eight directors at the Internet and entertainment company, which suspended meetings the past two years amid an accounting investigation.  "Because of this delay, only four of the company's 12 sitting directors have been elected by the stockholders," Starboard noted.  "The court should not permit the company to stall corporate democracy any longer."  ComScore's last annual meeting was held on July 21, 2015.  Since then, it has not file audited financials for 2015 and 2016; and it has appointed three new directors without a shareholder vote.  Starboard also protested that the company adopted a poison pill plan, without shareholder approval, that discourages any investor from amassing a more than 5% interest.  ComScore's stock has been under pressure since a February 2016 review of its financials that later uncovered inadequate public disclosures about its performance.  That came just weeks after it bought Rentrak Corp. in a stock swap valued at more than $800 million.

Marcato Capital Management LP penned a letter to Rent-A-Center Inc. (RCII) on Tuesday declaring that unless the company immediately launches a full sales process, it would "initiate and/or support efforts" to oust all directors seeking re-election at next year's annual meeting.  The hedge fund is backing Engaged Capital, which for months has pressed Rent-A-Center to put itself up for sale on the grounds that reviving the company would be best accomplished under private owners.  After winning a proxy fight in June, Engaged Capital now has three board seats at Rent-A-Center; but the company is still "brazenly ignoring the will of the shareholders," Marcato wrote.  Rent-A-Center has spurned overtures from private firms HIG Capital and Lone Star Funds and rejected an $800 million offer from buyout company Vintage Capital this month.  However, Marcato believes Vintage might pay more for the company if management negotiated.  The $15-per-share bid was an "opening offer, not Vintage's best and final offer," its letter argued.  Rent-A-Center's stock was up 2.5% to $12.68 on Tuesday.  While the company's strategic plan is showing some early results, Marcato cautioned that it is "laden with risks."  The investor informed the board that shareholders want it to explore strategic alternatives, and failure to listen could "constitute a breach of your duty as fiduciaries."

Brookdale Senior Living Inc. (BKD) has reached an agreement with Land & Buildings Management LLC to appoint Marcus E. Bromley—a veteran of the real estate industry with more than 35 years of leadership experience—as an independent member to the board with immediate effect.  Bromley fills a vacancy, so there remain a total of nine directors, including seven independents.  Jonathan Litt, founder and CIO of Land & Buildings, said, "Brookdale is substantially undervalued and has significant potential, and we believe that Marc's presence on the board and on its audit and investment committees will enhance the company's focus on exploring all pathways towards maximizing value for stockholders."  Per the agreement, Land & Buildings will adhere to standard standstill and voting provisions—including voting in favor of the board's proposed nominees at the 2017 annual meeting—and the company will consult with Land & Buildings regarding the composition of the board prior to the 2018 annual meeting.  Brookdale continues to work with legal and financial advisors to explore options and alternatives for maximizing stockholder value.

Ardent Leisure shareholders must soon decide whether to trust the board to formulate a workable turnaround strategy for the company or to stand behind a group of investors that says it can deliver $1 billion in savings?  Ardent's new CEO, Simon Kelly, is being pressured to provide a compelling plan within the next couple of weeks so investors can examine it prior to a Sept. 4 shareholder meeting to vote on the selection of four new directors.  Investors Gary Weiss and Kevin Seymour, who control approximately 10% of the company via Ariadne, have already developed a detailed proposal they claim will save $1 billion in costs over the next three years.  A large component of the strategy is centered on Ardent's U.S. entertainment business, Main Events, which Weiss believes has untapped potential.  The plan includes a gain of $425 million from rolling out 24 more Main Event centers in the United States, $175 million from turning around existing centers, and $300 million from getting people back into Dreamworld on the Gold Coast and surplus land sales.  Weiss and Seymour are want board representation, along with two additional directors.  Ardent on July 26 attacked Ariadne's proposal as a "vaguely expressed plan" that includes initiatives already being considered by the Ardent board.  For its part, Wilson Asset Management has not decided who it will support, but CIO Chris Stott says, "We have been very disappointed with the management of the company over the last 12 to 18 months and their communication."  Meanwhile, other shareholders have expressed skepticism about giving Ariadne's representatives four board seats without them having to pay a premium to control the company.  

Hedge fund Elliott Advisors is ratcheting up its engagement of BHP Billiton (BBL) with an ad campaign in Australia that plays on BHP's "Think Big" slogan.  BHP shareholders have not benefited from that mindset, according to dozens of new billboards, which suggest that the company's board "Think Smart" instead.  Elliott and BHP have been butting heads for some time now over the direction of the company, with the hedge fund calling for a board shakeup and a spinoff of its U.S. shale operations.

Elliott Advisors, which has a 9.5% stake in Akzo Nobel, on July 25 criticized the Dutch paintmaker for dismissing its request the day before for shareholders to add items to the agenda of a Sept. 8 extraordinary general meeting (EGM). Elliott said Akzo Nobel "has chosen yet again to flout fundamental shareholder rights" and called on Akzo Nobel to "immediately remedy its actions and to allow shareholders to exercise their fundamental rights." Elliott also said the company should pledge to add a vote at the EGM to remove Chairman Antony Burgmans, even though he announced earlier on July 25 that he would leave the company in April 2018.

Hockey executive Graeme Roustan, who recently has been re-branding himself as a shareholder activist, has prompted pharmaceutical company Aeterna Zentaris (AEZS) to explore a sale. Roustan has confirmed to The New York Post that he is the lead Aeterna shareholder, ahead of hedge fund Renaissance Capital. Aeterna stated last week that it had established a special committee of independent directors to maximize shareholder value, often indicative of a sale. The development came amidst prodding by Roustan, who wants the firm to give him three seats on the board, a source said. Roustan is best known as the former chairman of Performance Sports Group (PFGC), maker of Bauer hockey sticks. He exited Performance Sports Group after an unsuccessful attempt to purchase the struggling company's assets. He also is working to bring a second National Hockey League team to the Toronto area.

Barnes & Noble Inc. (BKS) indicated Tuesday it was open to discussing Sandell Asset Management Corp.'s demand for the company to hire an investment banker and put itself up for sale. "Neither [CEO Thomas] Sandell nor anyone from his hedge fund has reached out to us yet, but we welcome constructive dialogue with all of our shareholders," said a spokeswoman for the country's largest publicly traded bookstore chain. Earlier Tuesday, Sandell issued a public letter asking Barnes & Noble to sell itself, declaring shares have been undervalued while demand for books remains strong. Sandell has begun acquiring shares in Barnes & Noble and is one of its 10 largest shareholders, sources said. Shares of the company jumped more than 13% in midday trading Tuesday to $8.05, giving the retailer a market capitalization of $584 million. On Monday evening, the company had a market value of just over $500 million. Before Tuesday trading, the stock had tumbled 60% over the past two years. Barnes & Noble has been pummeled by competition from Inc. (AMZN), which commands the online sale of physical and digital books. As with many other retailers, Barnes & Noble also has struggled with declining store traffic as consumers increasingly shop online.

Two hedge funds announced they plan to vote against Sabra Health Care REIT Inc.'s (SBRA) proposed deal to acquire another healthcare REIT—Care Capital Properties Inc. (CCP)—arguing that Sabra is overpaying for questionable skilled nursing assets. Eminence Capital LLC and Hudson Bay Capital Management LP said that Care Capital's portfolio of 305 skilled nursing facilities is struggling and will likely continue to falter. "We think Sabra is making a big mistake in getting bigger in skilled nursing facilities," said Ricky Sandler, founder of Eminence Capital. "Our view is that it's a bad transaction." Before the Sabra-Care Capital deal was announced on May 7, Sabra said it had been diversifying from skilled nursing facilities. "In its public filings, the company makes it clear that asset class diversification is an 'achievement.' We therefore have serious questions with respect to the motivation and rationale for this deal," Eminence Capital said in an open letter. The hedge funds said that Signature Healthcare, a major tenant of Care Capital, is going through major financial distress and would likely file for bankruptcy protection. Both hedge funds added that apart from strategic concerns, they believe Sabra is overpaying for Care Capital's assets. "They didn't even get a good deal. They grossly overpaid," said Hudson Bay Capital portfolio manager John Chen. Eminence Capital owns a 3.9% stake in Sabra, while Hudson Bay Capital has about a 3.4% stake.

Engaged Capital LLC, the largest shareholder of Rent-A-Center Inc. (RCII), with a 20.5% economic interest, on July 25 issued a statement regarding its investment in RCII. "We are outraged to learn that according to media reports, prior to rejecting a $15 per share offer from Vintage Capital, the board of directors of RCII received expressions of takeover interest from two other private equity firms," the statement says. "Neither of these prior approaches were disclosed to shareholders, even in the context of rejecting the offer from Vintage Capital." The statement continues: "In June, shareholders of RCII sent the board a clear and unambiguous message when they overwhelmingly elected all three of Engaged Capital's nominees to the board, despite a pattern of entrenchment tactics from the incumbents. This wholesale rejection of the Company's nominees included unseating CEO Mark Speese from the board, who was Chairman at the time. While we cannot know what is going on in the boardroom, we find it hard to believe that the recently elected directors, who ran on a platform to evaluate all opportunities to enhance shareholder value, would not support engaging with potential acquirers. Assuming the media reports are true, we are concerned that the four remaining incumbent directors are willfully ignoring the voices of the majority of shareholders to continue the blind pursuit of the Company's risky turnaround plan." The statement speculates that "some of the incumbent directors may hold a personal loyalty to Mr. Speese and are willing to put their relationship with him ahead of their duties to shareholders" but questions why, if that is true, director Rishi Garg, a partner at the Mayfield Fund "would support the value destructive path chosen by the incumbent directors." Engaged Capital "calls on Mr. Garg and the other members of the board to act as independent fiduciaries and choose a path that offers the best risk-adjusted outcome for all shareholders," stated Glenn W. Welling, Chief Investment Officer of Engaged Capital.

Akzo Nobel Chairman Antony Burgmans—who has survived several removal attempts by Elliott Advisors—will step down when his term expires next April, opening the door to new possibilities for a deal with PPG Industries (PPG).  With Burgmans' pending exit and CEO Ton Buechner's recent resignation for health reasons, the two most vocal opponents to a deal with Akzo's U.S. rival will be gone.  Burgmans' upcoming departure marks a win for some major shareholders, who have been frustrated by the Dutch paintmaker's refusal to consider PPG's €26.3 billion ($30.6 billion) takeover bid.  Akzo's second-quarter profit also fell short of expectations on Tuesday, while the company rejected Elliott's demands for a vote on the immediate ouster of Burgmans.  Akzo and PPG are currently in a six-month cooling off period that expires in December, and analysts said a possible deal could be revived.  "The question now is whether Akzo's board will stay unanimous in its resistance of PPG," speculated analyst Joost van Beek of Theodoor Gilissen.  "The PPG story is not completely over, they will wait and see if new chances arise."  Akzo said it will hold an extraordinary shareholders meeting on Sept. 8 but will vote only on the appointment of new CEO Thierry Vanlancker.  Elliott, which owns a 9.5% stake in Akzo, had repeatedly pushed for Burgmans to go immediately.  A lawsuit on Elliott's demand for an extraordinary shareholders' meeting regarding Burgman's position is slated to be heard in Dutch court on Thursday.  Meanwhile, new CEO Thierry Vanlancker says he is committed to the standalone goals Akzo set for itself when it rebuffed PPG's offer.

Sandell Asset Management Corp. has acquired a stake in Barnes & Noble Inc. (BKS) and is pushing the bookstore chain to try again to sell itself, arguing it needs an owner who can invest in its struggling operations.  Sandell believes the company could garner a bid of more than $12 a share, compared with a closing price Monday of $7.10, according to a letter to be released Tuesday.  Even though physical bookstores have lost popularity in the cyber age, Sandell believes Barnes & Noble's identity as the only national chain could attract a wealthy private-equity firm or another retailer.  The company has considered various potential deals to sell or split itself up over the years, including a buyout attempt by Chairman Leonard Riggio.  But none of the plans materialized, and the stock has tumbled 60% in the past two years.  Barnes & Noble, like many retailers, has been dwarfed by Inc. (AMZN), which dominates the online sale of physical and digital books.  But Sandell believes Barnes & Noble shareholders are overreacting to the broader retail troubles, according to the letter.  The investor says it takes comfort in Amazon's planned purchase of Whole Foods Market Inc. (WFM) as well as the recent proposed leveraged buyout of Staples (SPLS), saying those deals demonstrate there is still value in traditional retail.

Sources report that Rent-A-Center Inc. (RCII) turned away takeover approaches from private equity firms HIG Capital and Lone Star Funds prior to rejecting an offer of $800 million from buyout firm Vintage Capital in July.  HIG and Lone Star each offered to pay a premium for the business, according to the sources.  Rent-A-Center declined to comment.  On July 11, the company said it had turned down a $15-per-share offer from Vintage to concentrate on its "strategic plan to restore growth and improve profitability."  Hedge fund Engaged Capital has a 16.9% holding in Rent-A-Center, making it the largest investor.  Engaged currently has three directors on the company's board—including one seat for the hedge fund's founder, Glenn Welling.  Marcato Capital Management, another hedge fund, previously disclosed a 4.9% stake in the firm.

Two shareholders of Sabra Health Care REIT (SBRA) on Monday opposed the company's proposed acquisition of Care Capital Properties (CCP), calling the deal too costly. During a presentation, Hudson Bay Capital Management, which owns about 3.4% of Sabra, called on shareholders of the healthcare-focused real estate investment trust to reject the merger at a shareholder meeting next month. Sabra was overpaying for Care Capital's assets by up to 30%, according to Hudson Bay. And in a letter, Eminence Capital, which owns about 3.9% of Sabra, said the deal would reverse the company's efforts to reduce exposure to skilled nursing facilities. Sabra owns real estate properties that serve the healthcare industry in the United States and Canada, while Care Capital has a portfolio of healthcare properties focusing on the post-acute care sector. In March, Sabra, which has a market valuation of about $1.6 billion, said it would buy Care Capital in an all-stock deal that would value the combined company at about $4.3 billion. Sabra said it would benefit from lower costs of capital by merging with Care Capital and that the deal would add to its earnings immediately.

Small shareholders are pushing for a board seat in Alembic to ensure better investor returns. Sources in the investor community say that most of these minority shareholders (around 440 of the total 1,000) were "created" in the last three days. The shareholders have moved a resolution to appoint a director, Murali Rajagopalachari, vice president of Unifi Capital, on the board of Alembic on their behalf at the company's annual general meeting on July 28. Unifi Capital has a 3% stake in Alembic. Shareholders have the right to raise their voice if they feel that value can be unlocked, says Shriram Subramanian, managing director of proxy advisory and corporate governance firm InGovern Research Services. "Although this is something new for India, it happens quite often in the United States," he said. Alembic de-merged Alembic Pharmaceuticals in 2011 with the intention of pursuing growth in formulations and export business. The holding company Alembic, which has interests in real estate (it has unused land assets), also has a market capitalization of Rs 1,190 crore, but it holds 30% in Alembic Pharmaceuticals, which has a market capitalization of more than Rs 10,304 crore.

BHP Billiton (BBL) is defending its fertilizer project in Canada against "deep concerns" by Elliott about the Jansen potash mine, given the saturated potash market. BHP, though, said on its Prospects blog that it would only develop the mine if it met strict investment hurdles and was in the best interests of shareholders. "We have an option in Canada to develop a potash mine that could support attractive shareholder returns over decades," stated BHP senior potash analyst Paul Burnside. "We're excited to have this option in our portfolio, and there are many ways we can realize value from it. Above all else, we would only proceed if it passed our strict investment hurdles and was in the best interests of our shareholders." Burnside stated that the potash market is rebalancing and new mines will be needed as supply and demand come into line. Elliott has a 4% stake in BHP.

Investment funds managed by Oaktree Capital Management L.P., which beneficially own 19.9% of the common stock of Tembec Inc., today announced that they fully support the proposed acquisition of Tembec by Rayonier Advanced Materials Inc. (RYAM) on the revised terms announced yesterday by Rayonier Advanced Materials and Tembec, and have committed to vote in favor of the transaction at the upcoming special meeting of Tembec shareholders. The increased consideration represents a 17% increase in equity value relative to the terms of the original agreement and a premium of 61% to Tembec's closing price on May 24, 2017, the day immediately before the initial announcement concerning the transaction. Pursuant to a voting and support agreement entered into with Rayonier Advanced Materials, Oaktree has irrevocably agreed to vote all of the Tembec common shares held by Oaktree's investment funds and entitled to vote in favor of the transaction. "We appreciate the constructive engagement we have had with Rayonier Advanced Materials and are pleased that its Board has responded with this higher offer price—we now fully support the transaction," said Patrick McCaney, managing director and portfolio manager for Oaktree's Value Equity strategy. "The revised offer presents compelling value to Tembec shareholders and enables shareholders to participate in the significant value creation opportunity of the combined entity."

Northern Oil & Gas Inc. (NOG) announced Monday it will add Life Time Fitness CEO Bahram Akradi to its board of directors, following Akradi's months-long campaign to become a director. The energy company said it expanded its board from seven to eight members to accommodate Akradi's addition. Previously, Northern Oil Chairman Richard Weber had resisted Akradi's pursuit, declaring the company would not increase its board size. Akradi, who owns a 9.7% stake in Northern Oil, wants to take the company in new directions in an effort to grow the struggling business. Northern Oil has been struggling to adjust to declining energy prices that hit its holdings in North Dakota's Bakken oil fields. Its shares, which traded as high as $30 in 2011, now trade under $2.

Elliott Management on Monday demanded an urgent response from Akzo Nobel's board regarding its concerns over the nomination of a new CEO.  Elliott has been unsuccessfully pushing the Dutch paintmaker to engage with rival PPG Industries (PPG) over a takeover bid it spurned multiple times.  The hedge fund pressed Akzo to verify the date of a general shareholder meeting to vote on the appointment of Thierry Vanlancker as the new CEO and to confirm shareholders will be given the right to add resolutions to the next meeting.  Vanlancker took the helm last week after former CEO Ton Buechner stepped down for health reasons.  Elliott said it was making its questions public after Akzo Nobel refused to engage and after it abruptly canceled a recent meeting with the hedge fund.  Elliott also called on Akzo Nobel to clarify the views of the new CEO and the supervisory board on the separation of the special chemicals business and the reliability of Akzo's 2020 targets.  Elliott, Akzo's biggest shareholder with a 9.5% stake, is currently pursuing court action to unseat Chairman Antony Burgmans over the rejected PPG bid.

Private equity company KKR & Co. LLP (KKR) will announce on Monday that it has inked a deal to pay $66.50 per share in cash to purchase WebMD Health Corp. (WBMD) It was first reported over the weekend that KKR was nearing an agreement to purchase WebMD.  The U.S. online health publisher's stock closed on Friday at $55.19, giving it a market capitalization of $2.1 billion. Blue Harbour Group in March boosted its stake in WebMD to 8.99%.

WidePoint Corporation (WYY) announced July 21 that it has reached an agreement with Nokomis Capital, L.L.C.—which owns about 15.4% of the company's outstanding common stock—to add two new directors to the board.  The two sides agreed to nominate Alan Howe and Philip Richter as Class II members of the board at the 2017 annual shareholders meeting, and they will also serve on the board's Nominating & Corporate Governance Committee and Compensation Committee.  Per the agreement, Nokomis will vote its shares in favor of the board's recommendations regarding director elections and other matters to be voted on at the 2017 annual shareholders meeting.  Nokomis also agreed to standard standstill commitments.  WidePoint Chairman Steve Komar said the company appreciates the continued support of Nokomis and welcomes the expertise and insights of the two newest directors.  Brett Hendrickson of Nokomis said the company believes the addition of Howe and Richter will further strengthen the board and ultimately enhance value for all WidePoint shareholders.

Telecom Italia's board plans to discuss on Monday the departure of CEO Flavio Cattaneo, the company said in a statement July 21. Cattaneo plans to leave the company within days, sources told Reuters, following clashes with top shareholder Vivendi. The statement noted that Telecom Italia's remuneration and appointments committee would also meet on Monday to talk about "a proposal to end the relationship (with Cattaneo) by mutual consent." Amos Genish, a top Vivendi executive, will be appointed Telecom Italia's managing director, the sources said.

A rebound in Honeywell's (HON) aerospace business and ongoing demand for its home and building technologies helped the company deliver another quarter of robust results. It also increased its full-year sales and earnings guidance. The strong results and upbeat outlook should boost new CEO Darius Adamczyk's defense against Dan Loeb, who has been calling for the company to spin off its aerospace business. Net sales rose 1% to $10.1 billion in the second quarter, easily surpassing the $9.88 billion that Wall Street was expecting. Net income rose 5.5% to $1.4 billion during the quarter, also ahead of analysts estimates of $1.36 billion. "We expect continued momentum in organic sales growth throughout 2017, supported by strong order rates and a growing backlog across many of our businesses," says Adamczyk.

Hudson's Bay Co. (HBC)—under pressure from shareholder Jonathan Litt—is unlikely to take its vast real estate holdings public any time soon, according to the head of RioCan Real Estate Investment Trust, a partner in a venture that holds some of those assets. Initial public offerings (IPOs) of two joint ventures with billions of dollars in U.S., European, and Canadian real estate are "unlikely at this point" because market conditions are poor, RioCan founder and CEO Edward Sonshine said in an interview on Thursday. The retailer formed those ventures in February 2015, one with RioCan and another with U.S.-based Simon Property Group Inc. (SPG). It said at the time the combined value was $3.8 billion. Sonshine, whose firm owns 12% of the Canadian real estate venture, said an IPO was not realistic. "The prevailing narrative is that retail is dead," said Sonshine, who disagrees. He added that HBC had many other options to get cash from its properties, including sale-leasebacks, financing, or subleasing. "It shouldn't be hard because it's great real estate," he said. HBC is under pressure from Litt to consider options including repurposing its real estate, closing stores, or taking the company private. Litt revealed a 4.3% stake in the company in June.

Australian institutional investors have welcomed Ken MacKenzie's rare step of meeting with large shareholders before becoming BHP (BBL) chairman in September, and have urged him to improve BHP's capital management and communication with shareholders. His decision to hold meetings reflects the pressure from institutional shareholders, including Elliott Management, to improve the miner's performance. MacKenzie's focus as chairman will be on capital allocation, ensuring return hurdles for investments and acquisitions are met, and board renewal. Paul Xiradis, Ausbil's executive chairman and chief investment officer, said it was a "little unusual" for a chair-elect to meet shareholders before starting in the job but "given the intensity of what's happening with Elliott and others I think it was the right move, and also institutional investors were keen to catch-up with Ken." Aside from better capital management, Xiradis also stressed the need for better communication and engagement with shareholders from BHP's board and management. MacKenzie's numerous meetings with institutions were considered an important step in that direction. BT Investment Management's head of equities Crispin Murray was another shareholder who met with Mackenzie and said the "chat was very good." "He's focused on things we think are important: capital allocation, returns on capital, and making sure they can make a difference," he said. "Ken's a good choice as chairman. He did a good job at Amcor."

Analysts believe Bunge Ltd.'s (BG) cost cutting and restructuring plans may give it a reprieve as it deals with a takeover bid from a bigger rival. Amid a downturn in the commodities market, the global grain trader's moves could lop $250 million off overhead costs by the end of 2019.  "We believe that management wanted to assure investors that the company does not need to be acquired, that it can deliver these savings that might have been synergies," says Ann Duignan, an analyst at J.P. Morgan.  "Also, it can deliver them on its own and increase returns to shareholders without needing to be acquired.  I believe that this plan buys management time."  Bunge in May spurned a takeover bid from Glencore PLC.  The company's restructuring announcement is viewed as a defense against both Glencore and Carlson Capital—which owned 1.24% of the company as of last quarter, according to securities filings.

BHP Billiton (BBL) appears to be preparing for a big move in the oversupplied potassium fertilizer business, but Elliott Management is unimpressed.  After BHP's chief potash analyst wrote a bullish blog item on the commodity's outlook, Elliott warned that the comments sounded "alarmingly familiar," considering the miner just wrote off more than $10 billion in U.S. shale investments.  Deutsche Bank estimates the massive Jansen mine the company is building in Canada could ultimately cost $13 billion to develop.  The amount of money involved could make BHP's potash move its most important strategic decision over the next five years.  Potash is a risky bet; however, it is incorrect to draw a direct analogy between it and shale.  BHP's main mistake there was investing at the top of the commodity bubble in a new, highly technical sector in which it had little experience.  By contrast, potash prices are down by more than half from their 2008 and 2009 peaks, and the mining technology is well established.  The main worry with potash is not demand, but supply: the market is expected to be saturated for the next decade, driven by major producers in Canada and Eastern Europe.  BHP's project would not come online until the mid-2020s, but margins might be unimpressive for the first few years.  Potash in 2017 makes more sense than shale in 2011, but it is still a risky gamble.

According to Germany's Manager Magazin, Nestle (NSRGY) CEO Mark Schneider is not ruling out larger acquisitions in health-science operations to bolster sales. Schneider was responding to a question about whether plans to increase sales of the health-science division to 10 billion Swiss Francs ($10.41 billion) from 2 billion required bigger purchases. He noted that the company is "acting prudently." When asked about investor Daniel Loeb's push to get the company to sell a stake in L'Oreal (LRLCY), Schneider said, "Nestle has performed exceptionally well with its engagement in L'Oreal for more than 40 years. I have nothing to add to this." Among other things, he said the company has no plans to spin off slower-growing businesses outside its four defined growth areas.

Jana Partners, which played a key role in sparking Whole Foods' (WFM) relationship with Amazon (AMZN), is cashing out.  Jana said June 19 in a Securities and Exchange Commission filing that it is exiting its position of 26 million shares, or about an 8.2% stake in the supermarket operator, making a profit of nearly $300 million.  Jana first reported its stake in Texas-based Whole Foods back in April.  At the time, the hedge fund urged the struggling grocery chain to either accelerate its turnaround strategy or put itself on the selling block.  Jana became Whole Foods' second-largest shareholder, initially accumulated its interest in Whole Foods by purchasing stock priced between $29 and $32 a share.

Elliott Management has warned against BHP Billiton's (BBL) plans to approve a $4.7 billion potash project in Saskatchewan.  "We share the deep concerns raised by analysts and shareholders that expanding into potash could be a severe strategic misstep," an Elliott spokesman said.  The hedge fund, which says it owns a 4% stake in BHP's London-listed shares, has been pushing to scrap the miner's dual listing and sell U.S. shale assets, saying the company has underperformed over the past decade.  This is the first time Elliott has spoken against the Jansen potash project, which has the potential to become BHP's largest-ever single investment decision.  "This sounds alarmingly familiar and comes as the company proclaims the dubious strategy of 'Thinking Big'—a concept that has been disastrous for BHP shareholders" the Elliott spokesman said.  "'Thinking Big' led BHP down the fateful path of diversifying into the U.S. shale market—investing $30 billion in assets that are today worth just $6.5 billion," Elliott added.  "With that track record, shareholders are correct in asking: Is potash the next U.S. shale?"

U.S. investment management firm Oaktree Capital Management is turning to both the Ontario Securities Commission and Quebec's Autorité des marchés financiers to address some of its concerns about Rayonier Advanced Materials' proposed takeover of Tembec Inc., saying there are disturbing questions about the role of Fairfax Financial Holdings Ltd. in the deal. Fairfax is based in Toronto while Tembec's headquarters are in Montreal. Los Angeles-based Oaktree is Tembec's biggest shareholder with a nearly 20% stake. The complaints come amid souring prospects for the US$807 million transaction. Oaktree and Restructuring Capital Associates, another Tembec shareholder, have both said the offer is too low, a view supported by proxy advisory firm Glass Lewis & Co., which is recommending Tembec investors vote against the deal. Oaktree's appeal to regulators centers on the declaration, made by Tembec and Rayonier when they announced their friendly merger May 25, that Fairfax, a major Tembec shareholder, "is supportive of the transaction." Fairfax subsequently sold its position in Tembec in the days that followed. However, because it was an investor as of the so-called record date—the cutoff used by companies to establish who their shareholders are—it might be entitled to vote the stake it held at that time despite the fact it has since cashed out.

White Tale Holdings has boosted its stake in Clariant AG from 7.2% to more than 10%, adding uncertainty to the Swiss company's proposed merger with U.S.-based Huntsman Corp. (HUN) to create a $14 billion chemicals giant.  White Tale is made up of investment funds 40 North Latitude Master Fund Ltd., controlled by David Winter and David Millstone, and Corvex Master Fund Ltd., run by Keith Meister.  "The U.S. activist investors' step makes a counterbid more likely," speculate analysts at Baader Helvea Equity Research.  "Clariant is the most obvious takeover target among European chemical companies due to an interesting portfolio and a relative low valuation."  The shareholder group first revealed a Clariant stake earlier this month and blasted the proposed merger with Huntsman.  "We believe shareholders ought to reject this value-destructive merger," the funds said July 4, adding that the proposed deal "significantly undervalues Clariant's shares and that far more value could be created for shareholders through any number of alternative transactions."

ABB's chief executive, Ulrich Spiesshofer, is under pressure to address lower profitability at the Swiss engineering company after higher raw material prices and overcapacity issues pinched its quarterly earnings.  The company reported a smaller-than-predicted gain in net profit on Thursday, sending its shares down 3% and putting pressure on Spiesshofer, who promised last year to boost the stock.  Spiesshofer said he did not feel under particular scrutiny from Cevian, ABB's second-biggest shareholder, which last year campaigned for a split of ABB's Power Grids business and which joined ABB's board earlier this year.  "The Cevian relationship is a very good one, we are working very well together," he said.  Cevian owns more than 5% of ABB stock.  Spiesshofer was speaking after ABB reported that net profit rose 29% to $525 million for the three months ended June 30 from $406 million a year earlier, missing forecasts of $580 million in a Reuters poll.  The earnings shortfall means investors' patience could now be running low with Spiesshofer, who became CEO in 2013, analysts said.  "Investors are getting more concerned about the decline in profitability," said Richard Frei, an analyst at Zuercher Kantonalbank.  "There has been a lot of restructuring at the company, which has yielded results, but now the effects are getting smaller."

In the wake of reports of illnesses contracted at a Chipotle Mexican Grill (CMG) restaurant in Virginia, Bill Ackman tweeted June 19 from one of the chain's locations.  The tweet included a photo of himself at the restaurant and the statement, "Eating our own cooking @ ChipotleTweets and making my own mix at"  Ackman's Pershing Square engaged Chipotle last year and won new board seats in December.  It had a 10% stake as of the end of March, according to FactSet.  The chain has been burdened by a number of food safety events that affected sales.  Shares have declined more than 9% this year and were little changed at midday Wednesday despite Ackman's photo.  The hedge fund manager joined Twitter under the handle @BillAckman1 at the end of June, and his office has confirmed that is actually him.

Ansaldo STS CEO Andrew Barr said the Italian rail-signaling company is seeking small acquisitions to offset a slowdown in the sector. However, it sees no quick solution to its battle with investment funds, led by Paul Signer's Elliott Management, holding nearly a third of the company. The investment funds have been in a feud with Ansaldo STS's controlling shareholder Hitachi since it bought the company in 2015, challenging the price paid, governance, and strategy. Elliott is Ansaldo STS's second-biggest shareholder, with a 22.5% stake, an option to buy another 8.8%, and three board seats. Hitachi initially acquired 40% of Ansaldo STS from Italian defense conglomerate Leonardo but later raised its stake to 51% through a mandatory buyout of minorities. However, it failed to reach the threshold required to delist Ansaldo STS and fold it into its own operations. Elliott made several complaints to the market regulator and filed a lawsuit that is now before the European Court of Justice, arguing that the bid price was too low. Elliott alleges that Hitachi underpaid by colluding with the seller and questions the independence of Ansaldo STS's board.

Glass Lewis & Co. has given its support to Oaktree Capital Group LLC's (OAK) attempt to block a proposed takeover of Montreal-based Tembec Inc. by Rayonier Advanced Materials Inc. (RYAM). The shareholder advisory firm urged investors in the Canadian lumber and paper producer to vote against the deal, arguing that the purchase price is too low. In its report, Glass Lewis also noted that there has been a significant increase in Rayonier Advanced's shares since the deal was announced, which indicates that it is underpaying and could afford to share more of the potential value with shareholders. "Putting these factors together, we believe there is reasonable basis for shareholders to expect more for their shares," Glass Lewis said. Oaktree, which owns 19.9% of Tembec, issued a statement agreeing with the advisory firm's conclusions. It sent a letter to the boards of both companies on July 14 stating that it would vote against the deal if the purchase price is not increased. Tembec's second-largest shareholder, Restructuring Capital Associates LP (RCA), which holds about 17.1% of the company's outstanding shares, has also come out against the deal. According to Glass Lewis, Oaktree and RCA have sufficient voting power to block the transaction, as a two-thirds majority is required to approve it. However, Institutional Shareholder Services Inc. has recommended that shareholders support the deal because it offered them flexibility to benefit from the upside of the combined business.

Dialectic Capital Management LLC, one of the largest shareholders of Covisint Corp. (COVS) with beneficial ownership of approximately 7.7% of the company's outstanding shares, has issued a public letter to shareholders announcing its intention to vote against the proposed acquisition of Covisint by Open Text Corp. at the company's July 25 special meeting. "Following years of mismanagement under the leadership of the board of directors and management team resulting in a depressed valuation, we believe it is wholly irresponsible for the Company to be sold now after posting its first quarter of profits," the letter stated. "Plain and simple, we believe the $2.45 per share price that is being offered to Covisint shareholders is completely inadequate. The current offer is seemingly representative of a company in secular decline with no growth opportunities, low margins, and no proprietary technology—none of which is the case with Covisint." Dialectic Captial added, "If the Company were to focus its sales efforts on the auto end market with an emphasis on existing customers, adjust its cost structure to be run profitably and look to grow responsibly either through small acquisitions or internal development, we believe the Company could be sold in the future for a much higher price."

CSX Corp. (CSX) shares are tumbling after CEO Hunter Harrison revealed on a Wednesday morning earnings call that he does not plan to stay at the company for too long. "I'm a short-timer here," Harrison told analysts. "I'm the interim person that's going to try to get this company to the next step and good foundation." Harrison's statement, along with declines in overnight trading, overshadowed the railroad company's strong second quarter. CSX netted $510 million in earnings, $65 million more than the same time last year. CFO Frank Lonegro attributed the growth to increases in coal pricing and efficiency savings of $90 million. Efficiency is a key focus of Harrison, who is implementing a precision scheduled railroading model. The railroad's operating ratio—an important measure of efficiency—improved from 69.4% for all of last year to 67.4% for the quarter, while revenue increased 8%. There was also an 8% decline in expenses since the last quarter, the result of CSX reducing its locomotive fleet, workforce, and hump yards. Harrison noted that more cuts are ahead, saying increased efficiency will attract more customers. For investors, Harrison's emphasis on efficiency brings hopes of faster future earnings, said Edgar Jones analyst Dan Sherman.

Harte Hanks Inc. (HHS) has reached an agreement with Sidus Investment Management, which owns 2.5% of the direct-mail marketing company's shares, to appoint Sidus managing partner Alfred V. Tobia Jr. and Melvin Keating to the board. "We look forward to working closely with Harte Hanks' management team and our fellow board members with the common goal of maximizing value for all shareholders," Tobia said in a statement. Harte Hanks and Sidus have entered into a "cooperation agreement." The agreement will be disclosed at a later time. Meanwhile, Harte Hanks has accepted the resignation of Stephen Carley from its board. The company has been struggling as digital advertising increasingly replaces traditional print advertising. In April, the company revealed it was slashing $10 million in annual costs and selling its 3Q Digital subsidiary as part of a move to enhance Harte Hanks' "strategic position and financial flexibility." Harte Hanks' annual meeting is scheduled for Aug. 17.

Dutch paint giant Akzo Nobel NV announced Wednesday that CEO Ton Büchner has stepped down for health reasons.  The move follows a months-long battle to fend off a takeover attempt from U.S. rival PPG Industries Inc. (PPG) and a campaign led by Elliott Management Corp. to push the company into sale talks.  Akzo is in the midst of spinning off its specialty-chemicals business from its paints-and-coatings operations, having promised shareholders that the strategy would generate more value than selling itself to PPG.  Thierry Vanlancker, head of Akzo's chemicals business, has been appointed as the company's new CEO; and said he has no plans to deviate from the current strategy.  PPG dropped an improved $28 billion takeover bid for Akzo in June after failing to initiate takeover talks.  Akzo rebuffed the offers as too low, while Elliott argued the company did not sufficiently engage with PPG.  In May, Elliott—which owns 9.5% of Akzo—lost an initial legal fight in the Netherlands to try to oust Akzo Chairman Antony Burgmans.  The hedge fund was betting then that Burgmans' removal would pressure Akzo into sale talks with PPG.  Although PPG has since dropped its bid, Elliott still wants the chairman gone because of the board's handling of PPG's advance.  Earlier this month, it filed a joint petition to call a general meeting of shareholders to vote on Burgmans' dismissal.

More than one-fifth of FirstGroup Plc shareholders voted against re-election of director Richard Adam at the annual general meeting (AGM), citing concern about his track record at builder and engineer Carillion Plc, which recently suffered a $1.1 billion charge against problem contracts.  Before retiring as Carillion's finance chief in late 2016, Adam approved a December trading update that said the company would make "further progress" in 2017.  But Carillion lost 71% of its market value last week following the disclosure of cost overruns on public-private construction deals in the United Kingdom and contracts in the Mideast and Canada.  FirstGroup revealed Tuesday that 22.7% of voters opposed retaining Adam, who joined the FirstGroup board in February.  However, the U.K. train operator pledged to stand by Adam, acknowledging the shareholder opposition but noting that fellow directors remain confident that his experience is of benefit to the company.  The magnitude of the shareholder rebellion at the AGM came as a surprise, since Institutional Shareholder Services had supported Adam in a note to subscribers.  The Canadian fund West Face Capital recently disclosed a more than 5% stake in FirstGroup.

The fate of a planned takeover of Quebec-based Tembec Inc. by Florida-based Rayonier Advanced Materials (RYAM) is in the hands of investors, who must cast at least two-thirds of votes in favor at the upcoming shareholders meeting for the deal to proceed.  However, Tembec's largest shareholder—Oaktree Capital Management, which owns a 19.9% stake—and others are resisting the deal.  Under the US$807 million agreement, shareholders can accept $4.05 in cash or 0.2302 of a Rayonier share.  Oaktree, which calls the transaction "flawed," plans to solicit proxies from those opposed to the deal.  It also raises the issue of empty votes, as Fairfax Financial—which had been Tembec's largest shareholder when the transaction was announced on May 25—has since sold off its 19.99% stake and "no longer beneficially owns, or has control or direction over any of the outstanding share," according to a filing.  Fairfax received a higher price than Tembec's shareholders stand to when they vote on the takeover on July 27.  Meanwhile, Restructuring Capital Associates L.P., Tembec's second-largest shareholder with a 17.1% stake, said it expects to vote against the takeover unless Rayonier sweetens its offer.  It added that its support hinges on whether "Rayonier responds more appropriately to the points made by Oaktree ... Oaktree makes a compelling case that Rayonier can and should improve its offer."  With opposition from both Oaktree and Restructuring, observers say it is impossible for the deal to reach the required two-thirds support threshold.

BHP Billiton Ltd. (BBL) said it plans to increase activity in the U.S. oil and gas shale fields that some shareholders—led by Elliott Management Corp.—want it to offload.  The move is expected to revive waning onshore production volumes even as BHP continues to invest in traditional energy operations and exploration in the Gulf of Mexico and other basins while angling to sell some unwanted U.S. shale acreage.  Elliott has led a campaign at BHP in recent months, calling for an extensive overhaul of the mining company and criticizing the billions of dollars spent on acquisitions and poorly timed share repurchases.  The shareholder pressure has drawn BHP's petroleum division into the spotlight and revived questions about the billions spent picking on onshore U.S. assets at the height of the natural gas boom.  BHP on Wednesday predicted a rise in overall production across its operations for the 2018 fiscal year, as steady growth in iron-ore output and a rebound in commodities including copper offset a further drop in petroleum volumes in the 12 months through June.  The company anticipates having up 10 rigs operating in its U.S. shale fields in the coming year, twice the number currently drilling for oil and gas, CEO Andrew Mackenzie said.  That will see it spending roughly US$1.2 billion—the majority of its US$2 billion petroleum expenditure budget for fiscal 2018—which is expected to deliver a 35% hike in shale production the following year after an expected decline in the current period, the company said.

Tesla Inc. (TSLA) on Tuesday named two new directors to its board, heading off criticism from some investors that the electric car maker's board members are too closely linked.  Joining the now nine-member board are 21st Century Fox CEO James Murdoch and Linda Johnson Rice, chair and CEO of Johnson Publishing Co.  The former has held several leadership roles at Fox and started a foundation that supports environmental sustainability.  The latter heads Ebony Media Operations and has served on a number of corporate and charitable boards.  Some Connecticut pension funds earlier this year called for annual elections of board members, pointing out that Tesla CEO Elon Musk's brother serves on Tesla's board. However, shareholders sided with Tesla, which advocated three-year terms.

Elliott Management has beefed up its campaign engaging retail shareholders of BHP Billiton (BBL) in an effort to make further change and maximize value at the company. The New York-based hedge fund is playing on BHP's new marketing slogan "Think Big" by urging shareholders to "Think Smart" about their investment in the world's largest miner. These retail investors account for about 30% of BHP's 600,000 shareholders. Elliott has rolled out a new website,, and a digital campaign targeting Australian retail shareholders. The new website alleges that decisions by BHP's current management, including outgoing Chairman Jac Nasser, have destroyed US$40 billion worth of value in the company. The campaign—which focuses on abolishing BHP's dual listing to stop the destruction of franking credits, exiting shale, reviewing petroleum assets, and reforming the board and asking for improved dividend and share buyback policies to deliver more to shareholders—calls on shareholders to sign a petition supporting the changes. "A unified BHP with smart dividend and buyback policies could deliver twice as much return over five years on a $10,000 investment in BHP—effectively doubling Australian shareholders' yield," indicates the presentation.

Shareholders in Ericsson AB (ERIC) were reminded that fixing struggling companies is difficult and takes time when the Swedish company warned on July 18 that demand for its telecoms gear would remain weak and more cost cuts were needed in its turnaround. The company's shares fell 13%, reversing the gains since CEO Borje Ekholm assumed the top post in January. Observers believe Ericsson's board, controlled by long-term shareholders Investor AB and Industrivarden AB, is to blame for the sense of drift after allowing the company to become bloated and unfocused. They believe the only reason for optimism is the arrival of Cevian Capital, which has built a 5.9% stake in the company since November. However, it controls only 3.5% of the voting rights, compared with the nearly 37% held collectively by Industrivarden and Investor. Cevian managing partner Christer Gardell publicly chastised the Ericsson board over its complacency soon after disclosing his fund's stake in late May, but more recently the fund has been working with Ericsson and signaled its support for Ekholm's planned revamp. Meanwhile, Chairman Leif Johansson said he will step aside before the 2018 annual shareholder meeting, after holding the position of chairman for the past six years. However, observers point out that Cevian is supposedly a patient activist that is now invested in a company where the Swedish model of patient capitalism has failed.

Tesla Inc. (TSLA) on Monday named 21st Century Fox Inc. (FOX) CEO James Murdoch and Ebony Media CEO Linda Johnson Rice to the board, expanding it to nine members.  The move comes after a group of shareholders in April called for improved corporate governance at the automaker, including a request for two new directors with no prior personal or professional ties to CEO Elon Musk.  Murdoch serves on the board of News Corp. (NWSA), is the chairman of Sky PLC, and took over at Fox in 2015.  Rice, along with running Ebony Media, has also served on the boards of Omnicom Group Inc. (OMC) and GrubHub Inc. (GRUB).  She becomes Tesla's second female director.  Dieter Waizenegger, executive director of CtW Investments Group—a signatory to the April letter—applauded Rice's appointment for adding diversity to the board.  He raised concerns about Murdoch, however, citing his handling of a phone-hacking scandal at the U.K. newspaper unit of News Corp. in 2011 as well as a recent controversy involving sexual-harassment claims at the Fox News Channel.  Waizenegger believes those issues make Murdoch a poor candidate "for a board that really needs to prove that it wants to take up shareholder accountability several notches."  CtW represents union-sponsored pension funds that own about 200,000 Tesla shares, while another pension fund that signed the April letter—the California State Teachers' Retirement System—owns approximately 248,000 shares, or 0.15% of Tesla.

BNY Mellon (BK) has selected the banker who led a digital move at Visa (V) to lead a technology-driven shake-up. Newly appointed CEO Charles Scharf plans to bring a "fresh set of eyes every day" to BNY. Scharf is joining BNY with immediate effect. Investors have been encouraging BNY to make a greater effort to handle the profit-dampening effect of chronically low interest rates. Nelson Peltz's Trian Partners won a board seat in 2014 and is BNY's eighth largest shareholder. "Technology is changing almost any industry across the world today—anyone who doesn't think so hasn't caught up with reality," Scharf said. "It's certainly true for this company." He added that, "There's even more opportunity to use technology in different ways—for incumbents and newcomers." Some analysts expressed surprise at the quick change of leadership and the bank's decision to select an external candidate. When questioned about the possibility of acquisitions and disposals, Scharf said he did not have "any preconceived notion that something [a part of the business] needs to go, or that we need to do something else," adding that BNY should "continue to not rest on the past."

In a CNBC interview on Monday, Nelson Peltz said he spoke with former Gillette employees who said they wouldn't have let online rivals Dollar Shave Club and Harry's gain as much of a foothold as Procter & Gamble (PG) did.

Nelson Peltz on Monday announced he would seek a single board seat in a shareholder vote at Procter & Gamble Co.'s (PG) annual meeting, making P&G the largest company to ever face a proxy fight.  Peltz's Trian Management Fund argues that P&G failed to capitalize on a five-year savings plan that shrank the company by tens of thousands of employees, more than a dozen factories, and hundreds of brands.  Trian questions whether a second $10 billion savings plan announced by P&G last year will produce results.  On Monday, P&G began mounting its defense, first citing a series of metrics outlining the company's improved profit margin, leaner structure, and healthy cash generation.  Trian, in meetings with P&G CEO David Taylor and other managers, offered no specific suggestions on how the company could better optimize cost savings, and was largely complimentary, according to sources.  P&G ultimately saw no value in adding Peltz to the board, they said.  The investor is not saying explicitly it wants more cost cuts than the $10 billion P&G has targeted, and is not giving specifics on how it would tackle the costs.  But Trian is concerned about whether the goal will be reached.  Trian says years of P&G's underperformance in revenue and the stock market have raised questions about why the board should be given another year to execute without Peltz in the boardroom to help guide management.  Central to Trian's case is the fate of about $3 billion of the $10 billion in P&G's previous cost reductions.  Trian argues that if P&G were operating efficiently, the $3 billion would have shown up in increased sales and profit growth, both of which have been stalled for years.

Nelson Peltz revealed on July 17 that he is seeking a board seat at Procter & Gamble (PG). Observers say the move is further proof of the growing power of top investors, who have successfully challenged ever-larger corporations into altering their corporate strategy.  In a regulatory filing, Peltz's Trian Fund Management contends that the consumer products giant has underperformed financially and is in dire need of a shake-up. Trian has called for Procter & Gamble to reduce costs and pare down its bureaucracy. The investment firm revealed in February that it had taken a $3.5 billion stake in the company. "As a member of the board, Mr. Peltz would seek to help the company increase sales and profits, regain lost market share, and address the company's structure and culture, and we believe that he can contribute far more value operating from within the company's boardroom than by merely advising the company from the outside," the firm stated in its proxy materials. It said it was not seeking to break up Procter & Gamble or replace CEO David S. Taylor, who has been at the helm for less than two years.

Oaktree Capital Management sent an open letter to Tembec shareholders on Friday protesting the forestry company's sale to Rayonier Advanced Materials (RYAM). The largest shareholder, with a 19.9% holding, Oaktree argued investors are not receiving fair value.  It vowed to vote against the deal unless the offer price is raised. As currently written, the terms give Tembec shareholders C$4.05 in cash or 0.2302 of a share in Rayonier.  While that is 37% higher than where Tembec's shares traded before the offer, it is below the $4.21 the shares commanded Friday on the Toronto Stock Exchange.  Patrick McCaney, Oaktree's managing director and portfolio manager, said if the offer is not increased, Tembec shareholders would be better off remaining independent.  He indicated Rayonier would benefit more from the deal by using Tembec to reposition its business away from the declining acetate market.  Meanwhile, Institutional Shareholder Services on Friday advised Tembec shareholders to approve the buyout at a vote scheduled for July 27.  The proxy firm cited "sound strategic rationale" and the flexibility of the cash/stock agreement.

Elliott Management's continuing engagement campaign with BHP Billiton's (BBL) institutional investors appears to be paying off, with top shareholders endorsing the hedge fund's push to shake up the miner's structure and petroleum division.   Elliott is believed to have backed the appointment of Ken MacKenzie as BHP chairman last month but wants to discuss how best to collapse BHP's dual-listed structure and separate the company's petroleum division.  Australian Foundation Investment Company (AFIC) and Wilson Asset Management (WAM) both said they had met with Elliott and welcomed the investor's campaign.  "I actually think they have been helpful in the sense that they have brought into the public focus the fact that BHP has actually underperformed over the last three, five to 10 years and nobody can deny that is true and management and the board aren't denying that either," said AFIC managing director Ross Barker.  WAM portfolio manager Matthew Haupt agreed that the debate prompted by Elliott had been valuable.  "I think it's healthy to have constructive debate around best use of funds," he said.  "I am supportive of those things, as long as they're constructive, and Elliott has been."  AFIC and WAM's comments mirror previous sentiments from other BHP shareholders, including Aberdeen Asset Management, Argo Investments, BT Investment Management, and Tribeca.

Canadian fund West Face Capital has raised concerns about the expansive transatlantic operations of FirstGroup, indicating it might push for a breakup of the bus and rail operator.  West Face reportedly believes the line's U.K. base is stifling the true value of its North American operations.  The hedge fund in June disclosed a 5% stake in FirstGroup, becoming its fifth-largest investor.  FirstGroup is listed on the U.K. stock market and is one of Britain's biggest transport groups.  However, the company makes more money in the United States and Canada, where it transports millions of students to school in its iconic yellow buses and manages the Greyhound coach network.  FirstGroup posted £284 million of operating profits last year, 85% of which came from North America.  Nonetheless, a source close to West Face explains, "The U.K. seems to be the tail that wags the dog, and so you have a situation where the share price is being affected by everything from Brexit to relatively small variances in the UK rail business, and that causes the whole enterprise value to trade cheaply."

On June 6, shareholders of General Motors (GM) voted overwhelmingly against hedge fund billionaire David Einhorn's push for a dual-class common stock structure, with 91% of the votes cast against the proposal. The shares cast by Einhorn's Greenlight Capital were just about the only votes in favor of the proposal, as 96% of non-Greenlight votes cast rejected it. Einhorn's efforts to get three directors on GM's board also were unsuccessful, with shareholders electing all 11 of GM's board nominees, who received between 84% and 99% of the votes cast. "We are disappointed that shareholders have elected to maintain the status quo," Einhorn said in a statement. "We congratulate GM's management on their win today."

On June 6, shareholders of General Motors (GM) voted overwhelmingly against hedge fund billionaire David Einhorn's push for a dual-class common stock structure, with 91% of the votes cast against the proposal. The shares cast by Einhorn's Greenlight Capital were just about the only votes in favor of the proposal, as 96% of non-Greenlight votes cast rejected it. Einhorn's efforts to get three directors on GM's board also were unsuccessful, with shareholders electing all 11 of GM's board nominees, who received between 84% and 99% of the votes cast. "We are disappointed that shareholders have elected to maintain the status quo," Einhorn said in a statement. "We congratulate GM's management on their win today."

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Nestlé's Slow Growth Plays Into Dan Loeb's Hands
" Wall Street Journal (07/27/17) Wilmot, Stephen"

Nestlé's (NSRGY) flagging second-quarter results reported Thursday may provide necessary ammunition for Dan Loeb. Like other consumer-goods groups, Nestlé is struggling with growth; however, unlike other consumer-goods groups, Nestlé is not offsetting its growth problem with a more radical approach to cutting costs. Second-quarter organic sales were up just 2.4% year-over-year, barely above the first-quarter growth rate. U.K. peer Unilever (UN) last week posted slightly disappointing second-quarter sales growth of 3%, but big margin gains. Yogurt-maker Danone pulled off the same trick Thursday, helped by initial cost savings from the acquisition of U.S. peer WhiteWave (WWAV). Nestlé had nothing comparable to offer. Its underlying operating margin was stagnant at 15.9%; cost savings were offset by rising commodity prices. Loeb argued in an open letter last month that management should set a formal margin target of 18% to 20% by 2020, as Unilever has done. Nestlé's excellent long-term track record has earned it loyal shareholders. But each quarter of poor growth undermines the company's exceptionalism. Loeb may be onto something.

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State Street Votes Against 400 Companies Citing Gender Diversity
" Dow Jones Newswires (07/26/17) Baer, Justin"

State Street Global Advisors (STT) voted against the re-election of directors at 400 companies this year because they failed to take steps to add women to their boards. The Boston-based money manager discovered that 476 companies whose shares it owned lacked a single woman board member. Of that group, the firm said 400 companies failed to make any substantial progress in addressing the issue and voted against the re-election of board members tasked with nominating new directors.  State Street pledged back in the first quarter to throw its weight behind the issue of gender diversity this year. State Street has previously taken an aggressive stance on certain corporate governance matters. In recent years, for instance, the firm focused on long-tenured board members.

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Investors Want More Women, Minorities on Corporate Boards
" Boston Globe (07/26/17) Leung, Shirley"

Not a single person of color sits on the corporate boards of Amazon (AMZN), Facebook (FB), and Netflix (NFLX), writes Boston Globe columnist Shirley Leung.  "For that reason alone," she notes, "the Massachusetts pension fund refused this year to support the slate of board nominees recommended by each company."  State Treasurer Deb Goldberg is taking an especially hard line when it comes to boardroom diversity. The state's $66 billion pension fund is a shareholder in nearly 9,000 companies. As a result of its new proxy voting guideline related to diversity, it voted against or withheld its vote in 69% of board member elections this year—an increase from 17% in 2012. "Goldberg's message to corporate America is simple: Massachusetts doesn't tolerate a board whose makeup is less than 30% women and people of color," states Leung. Nearly 1,700 companies failed to meet the state's new criteria on diversity, including Hershey Co. (HSY), Nordstrom (JWN), and Wal-Mart (WMT).

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Shareholders Voting to Allow Virtual Meetings at U.K. Companies
" Wall Street Journal (07/25/17) Stein, Mara Lemos"

Companies in the United Kingdom are moving toward holding their annual general meetings (AGMs) using electronic means only, which is a less expensive alternative to the physical meeting with the benefit of engendering greater shareholder participation. But the shift has institutional investors concerned that virtual meetings could be a way to gag company skeptics.  At least a dozen U.K.-based companies have amended their bylaws in 2017 to allow for AGMs to be held electronically in the future, whereby shareholders could follow the board of directors' annual presentation on their computers and pose questions online. While only one company has held virtual-only meetings in the United Kingdom to date, 177 U.S. companies had held AGMs using exclusively audio or video in the first half of the year. The increasing numbers of virtual-only AGMs in the United States have led some investors to protest the practice, due to worries that corporate boards may block shareholders in a remote location from posing difficult questions and expressing their views.

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FTSE Russell Says Most Investors Support Voting Rights for Index Inclusion
" Reuters (07/25/17) Kerber, Ross"

FTSE Russell said July 25 that a majority of investors it polled supported its idea that companies should offer at least some voting rights to be included in its stock indexes. FTSE Russell said in a report posted on its website that survey respondents provided comments on whether to include a voting rights threshold and at what level. The company plans to provide a detailed outline of its proposed approach in the coming weeks. Previously it was leaning toward setting a minimum threshold for the percentage of voting rights given to public investors, but the report on July 25 was a more formal statement of its findings. Other index providers also are examining the corporate structure of companies that list non-voting shares. Voting rights is a hot topic in corporate governance. Companies with the non-voting protocol have argued it allows them to concentrate on longer-term business planning. If FTSE Russell does not take action on the matter "the door could potentially be opened for an increasing number of companies to list without voting rights in the future," its report said. "On the one hand, I don't think the index providers should be sanctioning the departures from one-share-one-vote," said Robin Greenwood, a finance professor at Harvard Business School. "On the other, I often thought of the index providers as being surely passive, so in that sense they are just buying what investors are buying anyway. If I were in their shoes, I would probably decline to include them, to send a message, but this is just my personal view on the tradeoff."

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Governance Woes Plague Europe's Banks
" Wall Street Journal (07/24/17) Kowsmann, Patricia; Neumann, Jeannette"

Experts say corporate governance shortcomings are common in Europe's banks. For instance, when two Italian banks decided to merge in 2016, the lenders wanted to pare down the newly combined board from 47 members to two dozen. Following a months-long battle between the two lenders and the European Central Bank, the ECB forced the banks to cut the total number of directors to 19. Peter Nathanial, co-director of a program on banking governance at Europe's INSEAD business school, said boards should typically have between eight and 15 members depending on the complexity of the business. But there is no rule stating so.

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Activist Hedge Funds Pull Hard on the M&A Lever
" Reuters (07/25/17) Flaherty, Michael"

Activist hedge funds increasingly want companies to explore a sale, as evidenced by a hike in such campaigns over the last year.  There have been 91 U.S. activist drives so far in 2017 that have urged firms to explore some type of sale process, more than double the number a year ago, Thomson Reuters data show.  In addition, the number of activist investments that resulted in a company sale surged from seven in 2010 to 25 in 2014 and 36 in 2016.  Activist investors are drawn to the potential windfall from a sale, turning what was once a fall-back option into preferred strategy and causing numerous takeovers in the process.  The rise in activist-driven deals has helped boost returns of dissident investors—although campaigns to spur company sales could put activists at odds with some major investors and undermine their recent attempts to present an image of long-term value creators rather than quick-buck artists.  Embattled mutual fund managers who support the deal campaigns to lock in a positive return and the decreasing number of companies where a quick fix can yield results are feeding the trend, according to Goldman Sachs Group Inc.  "Activists are pushing for strategic review because in a lot of situations, selling the company today at current valuation multiples offers a better risk-adjusted return than waiting for the current strategy to play out," said Waheed Hassan, head of activist defense at advisory firm Alliance Advisors.

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Activist Investors Lead 'Quiet Revolution' in Italy
" Financial Times (07/22/17) Thompson, Jennifer; Sanderson, Rachel"

Activist investors increasingly are focusing on Italy, encouraged by improving corporate governance and the weakening of traditional company owners during Europe's sovereign debt crisis.  The number of Italian companies facing pressure from activist shareholders jumped to 12 last year from four in 2013.  The rise follows a disassembling of company cross-shareholdings—which have previously made Italian businesses invincible to outsiders—and Europe's sovereign debt crisis that began to accelerate in 2010, relaxing the grip of the Italian government and powerful family owners on many of the country's biggest businesses.  Joseph Oughourlian, founder of U.K. hedge fund Amber Capital, said a number of rights issues by Italian firms over the past decade have further loosened the hold of traditional shareholders, enabling activists to step in.  He said a "quiet revolution" has taken place in southern Europe, moving the area away from its reputation as "a world of controlled capitalism."  "There will be increasing voting from foreign shareholders," he predicts. "During [the] crisis of 2012, there weren't any Anglo-Saxon shareholders.  They are now coming back."

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Board Practices Hurt Banco Popular, Experts Say
" Wall Street Journal (07/24/17) Neumann, Jeannette; Kowsmann, Patricia"

When the European Central Bank began to regulate Banco Popular following a rescue this past June, it inherited a bank that analysts say was overcome with governance issues.  Experts say the bank's problems included directors who were not independent enough from management and deals with companies that had ties to the board.  In its 2016 annual report, the bank reported seven of 15 board members as independent.  However, four had longstanding ties to Banco Popular, which governance experts say limited their ability to challenge executives' decisions.  Analysts say the relationship between the board and management contributed to the board's hesitance to remove Ángel Ron as executive chairman despite shareholder concern the bank was not doing enough to shed roughly €37 billion in sour loans.  Ron was replaced in December after 12 years at the helm and more than a 90% decline in the bank's share price.  "Truly independent board members are key to avoid conflicts of interest that end up impacting stakeholders," said Carlos García, an analyst with financial services firm Kepler Cheuvreux SA.  "Popular is an example of why governance matters."  Another issue for Banco Popular was its relationships with firms that had representation on its board. Members of the board also approved deals that made it appear the bank was on sounder financial footing than it actually was, analysts say.

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Consumer Goods Make Appetizing Target for U.S. Investors
" Financial Times (07/21/17) Daneshkhu, Scheherazade; Nicolaou, Anna"

U.S. investors are drawn to consumer goods companies for a variety of reasons, observers say. For example, Nelson Peltz has engaged several food companies including Heinz (KHC), Cadbury, Mondelez (MDLZ), PepsiCo (PEP), and Danone. Just this week he entered into a proxy battle to obtain a seat on the board of household products company Procter & Gamble (PG), in which his Trian investment group invested $3.3 billion this year. Peltz is not alone in his attraction to consumer goods companies. Dan Loeb's Third Point has taken a $3.5 billion stake in Nestlé (NSRGY), the world's biggest consumer goods group. Loeb called for a "greater sense of urgency" to improve performance at Nestlé, which he called "staid" and "stuck in its old ways." Peltz expressed similar sentiment about P&G—referring to "excessive cost and bureaucracy" and "a slow moving and insular culture." Francois-Xavier de Mallmann, chairman of investment banking at Goldman Sachs, says activist investors are boosting their involvement in the consumer goods sector. "Activists have been investing in the consumer sector for several years but there has been a sizeable increase in both the number and size of the companies they have [engaged] over recent months," he notes. They are appealing, because they tend to be huge conglomerates with a lot of excesses that can be cut. "Sales growth in consumer industries has slowed and because of this you are seeing the rise of activist investors, looking to cut costs to boost profitability," says David Dudding, European equities fund manager at Columbia Threadneedle Investment.

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Swiss Inc. Shaken Up by Laws Emboldening Activist Investors
" Bloomberg (07/21/17) Foerster, Jan-Henrik; De Sousa, Agnieszka; Baghdjian, Alice"

Swiss companies need to rally their defenses or they will attract further activist intervention, according to Nuno Fernandes, a professor at IMD business school in Lausanne.  Shareholders are taking advantage of legal changes that give them more clout to oust board members and slash CEO pay in the country with the highest executive compensation in Europe.  The surge in activism stems from a referendum several years ago when Swiss voters opted to expand shareholder rights.  Now Switzerland is one of the few countries where shareholders have a binding vote over how much money the board and CEOs get.  Moreover, each board member's seat goes up for reelection each year, giving shareholders the power to fire a company's leadership en masse.  Daniel Loeb rattled corporate Switzerland last month when his Third Point disclosed a $3.5 billion stake in Nestle SA—the biggest Swiss company by market value—and demanded that Nestle repurchase shares and boost sales growth.  "Switzerland is a great place for activists," said hedge fund manager Rudolf Bohli of RBR Capital Advisors.  "Swiss chairmen are among the most overpaid in Europe.  I think the Loeb move may motivate other investors."  Activist investors are using executive pay to rally minority shareholders for their cause, said Mariel Hoch, a lawyer at Baer & Karrer in Zurich.  With the funds increasingly flowing into activist strategies, they have the power to engage large multinationals in Switzerland and Europe, as well as in the United States, she said.

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State Street: Corporate Governance Has Grown Up
" Financial Times (07/21/17) Marriage, Madison"

Rakhi Kumar, head of corporate governance at State Street Global Advisors, addresses many of the top issues facing the shareholder community.  One of her biggest concerns is the move by many of the world's largest tech companies—like Snap, Facebook, and Alphabet—to implement controversial voting structures that restrict shareholder power.  More vocal than many of her rivals in criticizing this practice, Kumar has taken the rare step of calling in the U.S. regulator.  She sees regulatory action as a final course of action, having campaigned companies for years with no result to stop adopting inequitable voting structures.  With or without the regulator's help, Kumar intends to continue lobbying against the practice.  "For us as shareholders, we appoint directors to oversee companies.  If we don't have the ability to appoint directors and the company is not going in the right direction, then we don't have any rights," she explains.  "We have to keep talking about this issue.  We can't [stop] pushing back against dual share-class structures as they are not in our best interests."  Kumar also says State Street is applying more pressure to a wider range of companies on certain issues.  This year, for the first time, the firm will include quantum—amount of money paid to CEOs—when screening for companies with potentially problematic pay structures.  State Street also pledged earlier this year to vote against company directors that do not commit to improving gender diversity in their boardrooms.  Kumar concludes that corporate governance has matured, as directors have become more receptive to alternative perspectives and as companies have recognized that index managers are taking a more active role in tracking governance standards.

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Akzo Nobel Faces Dilemma Over Shareholder Vote on New CEO
" Reuters (07/21/17) Meijer, Bart; Sterling, Toby"

The resignation of Akzo Nobel's CEO presents a dilemma for the company, because an upcoming shareholders' meeting to approve his replacement could pave the way for a vote on Chairman Antony Burgmans, who rejected a takeover bid by U.S. rival PPG Industries (PPG) that many shareholders wanted.  Thierry Vanlancker was named the new CEO June 19 after his predecessor, Ton Buechner, unexpectedly resigned for health reasons.  Shareholders must approve Vanlancker as CEO, but a meeting could also give them an opportunity to demand a vote on Burgmans—which they have been requesting for months.  Elliott Advisors, Akzo's biggest shareholder with a 9.5% stake, filed a lawsuit in May seeking Burgmans' removal.  Elliott's request was rejected, but its legal efforts to unseat him are ongoing.

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Chinese Firms Post Improving Corporate Governance: Survey
" China Daily (07/20/17)"

Chinese companies are doing a better job of upholding corporate governance standards, according to a new Institutional Investor survey. A number of Chinese mainland companies rose to the top of the rankings of the 2017 All-Asia Executive Team Honored Companies, edging out several of 2016's winners from India, Southeast Asia, and Australia. Will Rowlands-Rees, managing director of Institutional Investor Research, says the surprising thing is Chinese firms are meeting both local corporate governance standards and most international standards.

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Most Activism 'Behind Closed Doors': Bennelong
" InvestorDaily (07/19/17) Stewart, Tim"

According to Bennelong Australian Equity Partners investment director Julian Beaumont, Elliott Management's efforts to shake up BHP Billiton (BBL) are not symptomatic of a broader trend. Beaumont said, "Activism has said to be on the rise for a number of years now and it goes in patches—and clearly there's another patch right now. But there doesn't seem to be any broader scope for it. A lot of the activism in Australia's actually behind closed doors." He indicated that most fund managers prefer to maintain relationships with the companies they invest in and are reluctant to criticize them publicly. Even so, he said shareholder activism, whether public or not, is healthy for investors. "Management needs to be somewhat more accountable. What's been shown—particularly overseas, but perhaps to a lesser extent in Australia—is that management teams do improve their corporate governance through their disclosure and do come back to be more responsive to shareholders as a result of shareholder activism," Beaumont said.

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Opinion: Why All Shareholder Voices, Even Passive Ones, Matter
" New York Times (07/20/17) Litt, Jonathan"

Jonathan Litt, the founder and chief investment officer of Land & Buildings Investment Management, makes the argument for why passive and active shareholders should work together. As the popularity of index funds and passive investing strategies grows in the United States, the conversation has turned to what role these index funds should play in contested situations where shareholder votes can decide a company's future. Because of the sizable stakes that index funds like State Street, Vanguard, and BlackRock now have in so many companies, they often become the swing votes in proxy fights, determining whether an activist investor's or company's nominees get elected to the board. Lately, some have called for stripping the indexes of these voting rights. They argue that because these funds are passive, that alone should disqualify them from voting, or that they are not as incentivized to address poor corporate governance issues that hurt ordinary investors. "As an activist investor who recently lost an expensive, months-long proxy campaign [at Taubman Centers] where a lack of support from the indexes was the difference, you might expect me to be firmly in the camp advocating to disarm these funds. You would be wrong," Litt writes. In public U.S. companies today, he says, it is important to remember the deck is stacked against all shareholders—which is why both passive and active must work together to make their voices heard. "Ultimately all investors—active, passive, and activist—need each other to help instill accountability and fight back against poor governance, underperformance, and corporate self-enrichment at the expense of shareholders," he concludes.

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Most Japan Firms Reluctant to Boost Shareholder Returns Further: Reuters Poll
" Reuters (07/20/17) Kajimoto, Tetsushi"

According to the Reuters Corporate Survey, fewer than a third of Japanese firms plan to increase shareholder returns this financial year, despite the fact that close to 50% have seen cash on hand rise. Prime Minister Shinzo Abe has encouraged companies to return more to shareholders or hike capital spending as part of an effort to improve corporate governance and make Japanese companies more attractive to foreign investors. In response, combined shareholder returns for firms listed on the Tokyo bourse's main board have jumped more than 20% in each of the three years to the end of March 2016, but gains dropped to 2.2% in the past financial year, according to Goldman Sachs data. The survey indicates that 60% of companies plan to keep shareholder returns flat this year, 29% plan to boost them, and 2% plan cuts. Thirty-one percent of companies cited the need to set aside funds for "uncertainties." Of the 45% of companies that saw cash on hand increase in the past financial year, about 25% said cash on hand had surged 10% or more. Kengo Nishiyama, a strategist at Nomura Securities, said, "If they don't let cash circulate through the economy, it will remain stagnant, which will make it harder for firms to find investment opportunities, causing a vicious cycle."

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Companies Go Public, and the Board Is a Boys' Club
" Wall Street Journal (07/19/17) Lublin, Joann S."

In spite of aggressive efforts to put women on corporate boards, few newly public companies do so.  Nearly half of the 75 largest initial public offerings of the past three years involved companies that lacked women board members when they went public, a new analysis by the 2020 Women on Boards advocacy group found.  Most of those 37 companies still have all-male boards. Directors of newly public companies can reap sizable rewards.  A review of 2016 proxy statements by Equilar Inc. shows that about 42% of 236 major concerns with IPOs in 2014 and the following year gave new board members an initial equity grant, worth an average of $347,000.  That compares with 19% of more established companies, where initial stock awards averaged $185,000. The 2020 Women on Boards report represents the first research about boards' gender makeup at newly public U.S. businesses.

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Unilever Cuts Costs on Flights, Products as Investors Circle
" Bloomberg (07/20/17) Buckley, Thomas"

Unilever (UL), the maker of Hellmann's mayonnaise and Dove soap, is zooming in on profitability amid shareholder pressure on consumer-goods giants contending with stagnant growth.  The company said Thursday it is ramping up an efficiency drive as it responds to a failed takeover bid from Kraft Heinz Co. (KHC) and as competitors Nestle SA and Procter & Gamble Co. (PG) field pressure from Dan Loeb and Nelson Peltz.  "If it really benefits the long-term shareholders and there is constructive change to the benefit of the company, then at times it might be good to have actively involved investors," CEO Paul Polman said in an interview with Bloomberg TV, after Unilever reported better-than-anticipated earnings for the first half.  The company said Thursday it raised prices by 3% in the second quarter, offsetting stagnant volumes, and is cutting spending on everything from employee flights to product ingredients.  As it steps up efficiencies in the second half, profit margins could increase by more than 1 percentage point for the full year, Polman predicted during a call with analysts.  Unilever shares are up roughly 25% since Kraft Heinz's takeover approach was unveiled in February.  The company vowed greater profitability after rejecting the bid, boosted its dividend payment by 12%, and has committed to repurchasing €5 billion worth of stock.  Since then, Loeb's Third Point has purchased a stake in Nestle while Peltz's Trian Fund Management has launched a campaign at Procter & Gamble.

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As Proxy Season Winds Down, a Look at the Numbers
" Bloomberg BNA (07/18/17) Hyland, Kristyn"

According to data from Bloomberg Law, the number of shareholder proposal no-action letter requests submitted to the Securities and Exchange Commission (SEC) rose from 218 in the first half of 2016 to 231 in the first half of 2017. This year, proxy access bylaws were again the most popular shareholder proposal topic, with 50 proposals, followed by proposals related to human rights and social issues, with 44. SEC staff decided that 74% of the proposals related to environmental issues that were not withdrawn before SEC comment must be included in the company's proxy materials. The Health Care, Financials, and Consumer Discretionary sectors all submitted 40 no-action letters each to the SEC. Nine of the no-action letters in the Financials sector dealt with shareholder proposals relating to executive compensation, and seven were requests regarding proxy access bylaws. Fifteen of the letters in the Consumer Discretionary sector were requests about human rights/social issues, and six were about proxy access bylaws. Fourteen of the letters in the Health Care sector were requests about risk management, and eight were about proxy access bylaws. Utilities and Communications rounded out the top five sectors with the most requests, with 22 and 20, respectively. In the Utilities sector, 10 no-action letter requests were related to environmental issues, and five were related to proxy access bylaws. Six of the requests in the Communications sector were related to human rights/social issues, and four were about proxy access bylaws. The proxy access bylaw topic was the second most common shareholder proposal topic for each of the five top sectors.

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New York's DiNapoli Asks Dimon to Back off a Proxy Reform
" Reuters (07/19/17) Kerber, Ross"

New York State Comptroller Thomas DiNapoli is attempting to recruit JPMorgan Chase & Co. (JPM) CEO Jamie Dimon to help save shareholder resolutions. In a letter last month, DiNapoli asked Dimon to halt efforts by an executive group he chairs—Business Roundtable—that would make it harder to file shareholder resolutions. The changes would "ultimately jeopardize corporate transparency and accountability," wrote DiNapoli. The Roundtable, an association of corporate CEOs that has pushed to scale back securities regulations, supports a bill passed by the U.S. House in June that would raise the threshold needed to file a shareholder resolution by boosting the minimum holding requirement to 1% of a company's stock, held for three years. The measure faces an uncertain future in the Senate. Dimon has famously clashed with his own investors, and the proposed changes come as some shareholder measures begin to receive unprecedented investor support. An example came in May at Exxon Mobil Corp (XOM) where DiNapoli's fund filed a measure calling for it to report on risks it could face from climate change policies. It passed with a historic 62% of votes cast, reflecting support from big investors including BlackRock Inc. and Vanguard Group, according to sources. DiNapoli's fund would not have been able to file the Exxon resolution under the 1% threshold, given that it owns just 0.28% of the company.

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P&G Chief Executive Wrestles With Changing an 'Insular' Culture
" Financial Times (07/18/17) Nicolaou, Anna"

Procter & Gamble (PG) shareholders have been unhappy for some time, and leadership has been blamed.  CEO David Taylor is promising a shakeup at the consumer goods giant, but investor Nelson Peltz wants him to pick up the pace.  Taylor says management can boost sales growth and change its culture without breaking up the company, but engagement last month by Peltz adds time pressure to the process.  After Trian Fund Management purchased a $3.5 billion stake in P&G in February, P&G said it would consider giving Peltz a board seat if performance does not improve in the next year. The hedge fund manager chose not to wait until then and put himself up for nomination to the board, arguing that a "motivated" outsider was needed to spark change now.  P&G has been criticized for largely promoting from within; and Trian says its shareholder returns during the past 10 years have significantly lagged peers because of "excessive cost and bureaucracy" and "a slow-moving and insular culture."  When Taylor became CEO in November 2015, he pledged to shed more than half the company's brands and slash $10 billion in annual costs by 2021.  In response to the engagement by Peltz, P&G has hired a number of prominent advisers to defend the board.

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How a Billionaire Hedge Fund Manager Plans to Transform the Biggest American Power Producer Without Getting Burned
" CNBC (07/18/17) DiChristopher, Tom"

Billionaire hedge fund manager Paul Singer and Bluescape Energy Partners head Charles John Wilder have launched a plan to transform NRG Energy (NRG), the nation's largest independent power producer.  In an effort to improve shareholder value, they aim to shrink NRG from a sprawling giant with significant clean energy holdings to a smaller and simpler generator and seller of electricity.  Wilder won a board seat at NRG in February after partnering with Singer to press for change.  Singer's Elliott Management owns a nearly 6% interest in NRG, while Bluescape owns about 2.8%.  After shareholders opposed NRG's aggressive expansion into renewable power and sustainable energy, Wilder and CEO Mauricio Gutierrez are working to shrink the company, attempting to generate about $1 billion in cost savings while seeking to sell off all or part of its renewable energy business and part of its conventional energy portfolio.  The move would lower NRG's debt load and generate as much as $6.3 billion to invest in higher-yielding businesses or fund shareholder payouts.  Meanwhile, Dynegy (DYN) has been identified as a potential acquisition target for NRG, which would give it the opportunity to snap up a large portfolio of combined cycle plans and re-enter the Pennsylvania-New Jersey-Maryland market with more competitive assets following the bankruptcy of its GenOn unit.

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Directors as Strategic Company Assets: Making the Most of Very Expensive Real Estate – Board Seats
" Metropolitan Corporate Counsel (07/17/17)"

Metropolitan Corporate Counsel interviews Robyn Bew, director, strategic content development for the National Association of Corporate Directors (NACD), for her take on the evolving environment for board-shareholder engagement. With regards to engagement with the investor community, she notes that there are a few drivers. "For one thing, investors certainly have more influence now than they did 10 years or even five years ago," she states. "Some pay votes may be advisory only, but they still get an awful lot of attention. On most boards, larger cap companies have majority voting, and the results of those annual direct elections are also very visible." Bew acknowledged that corporate directors are being asked to do a lot more homework than ever before. "The annual governance surveys that we do at NACD do show that the level of time investment by directors is going up," she concludes. "In terms of preparation, directors tell us that they're really focusing on staying current with trends in the company's industry."

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Women on Executive Boards: 2016 Setback Belies Broader Trend
" Bloomberg BNA (07/17/17) Douglas, Genevieve"

The percentage of women among newly appointed directors in 2016 decreased for the first time in seven years, according to a study by executive search firm Heidrick & Struggles. In 2016, women accounted for 27.8% of new director appointments at Fortune 500 companies, a 2 percentage point decline from the previous year. One contributing factor may be that the majority of director appointments were chief executive officers and chief financial officers, which "are not a particularly diverse group," says Jeff Sanders, vice chairman and co-managing partner of the global board and CEO practice at the firm. To combat the status quo, companies should have a more performance-based approach with potential candidates for C-level and CEO roles, says Terri Hartwell Easter, principal of T.H. Easter Consulting. Sanders, who believes boards will continue to focus on diversity, points to the gains in the technology sector. Women accounted for 40% of the board seats filled in the tech industry, an increase of approximately 13.5 percentage points compared with Heidrick & Struggles' data from 2015.

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The Answer to Short-Termism Isn't Asking Investors to Be Patient
" Harvard Business Review (07/18/17) Edmans, Alex"

Many companies prioritize quarterly earnings over long-term innovation, human capital investment, and brand development, and short-term shareholders are often blamed, according to Alex Edmans, a finance professor at London Business School. The thinking is that short-term investors are not interested in the company's prospects beyond the year or so they plan to hold the stock, and they will sell their shares if the company misses its quarterly earnings target. "The fear of such selling forces the firm to fixate on meeting the target, cutting investment to do so. Moreover, since shareholders can sell at the drop of a hat, the firm has no stable source of long-term capital, and so cannot make long-term plans," says Edmans. "However, laying the blame on short-term shareholders is shooting at the wrong target, and may actually make things worse. The error in the popular argument is that it confuses the holding period of a shareholder with her orientation. Short-term selling need not be based on short-term information. ... Critically, short-term selling by shareholders need not entail short-term behavior by managers. Instead, it disciplines it, a mechanism known as 'governance by exit.' In fact, the evidence shows that short-sellers actually discipline earnings management, the practice of making a company's performance look better than it is in order to meet an earnings target." Edmans notes that what matters is not whether shareholders hold for the long-term but whether they trade on long-term information, which can be ensured by encouraging them to take large stakes. Thus, the focus should be on creating large shareholders, not long-term shareholders. He says, "The best form of loyalty is conditional loyalty: staying with a firm, even if short-term earnings are low, but only if the firm is pursuing long-run value. It is the combination of loyalty if the firm continuously innovates for the long-term, plus the threat of exit if it coasts or pursues the short term, that will help build the great companies of the future."

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How Companies Should Fend Off Attacks From Activist Investors
" Business Standard (07/18/17) Petry, Stefan"

Activist investors often emerge loudly announcing their plans and taking aim at the performance of CEOs. Stefan Petry, a finance lecturer at the University of Manchester, says the best way for a company to defend itself from activist investors is to borrow some of their tricks. "Dealing with activist shareholders can be a lengthy and distracting endeavour for target CEOs; the natural reaction is try and fend them off. However, in essence, activist investors provide a 'free' but confrontational market assessment of the firm, and they do highlight possible areas of improvement," says Petry. "This assessment can, of course, be wrong. However, research suggests that in the majority of cases, the stock price goes up at the announcement of an activist investor taking a large stake in a firm, suggesting that shareholders expect future value increases. And it is not only the target company's shareholders who benefit. Research also shows that rivals often begin to implement measures that might prevent them falling under the gaze of activist investors themselves." He adds that "the best defense against activist investors is attack, but aimed squarely at their own failings. CEOs need to mimic activist scrutiny over their own firms and by doing so, become less attractive as a potential target. It is important for bosses to continually benchmark themselves against leading peers and to keep close ties to existing large shareholders. They are the crucial factor that can tip the balance one way or another, and giving an ear to their more gentle concerns could dissuade them from a dangerous alliance with the activists."

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Ericsson Speeds Cost Cuts as Turnaround Proves Challenging
" Bloomberg (07/18/17) Rolander, Niclas"

Ericsson AB (ERIC)—under pressure from Christer Gardell, whose fund Cevian has acquired a roughly 6% stake in the company since March—has warned that revitalizing the struggling phone-equipment maker will require even deeper cost cuts.  Ericsson declined as much as 13% in Stockholm after the company posted a second-quarter loss and cautioned that a faltering market amid technology shifts could cause as much as 5 billion kronor ($600 million) of operating income to disappear over the next 12 months.  CEO Borje Ekholm, who took over in January, is under pressure from Gardell to deliver a quick turnaround.  His plan depends on reducing costs and scaling back expansion plans that have not been successful while refocusing on Ericsson's core business of selling networking equipment ahead of the expected roll-out of 5G networks.  "We are not satisfied with our underlying performance with continued declining sales and increasing losses," Ekholm said in a statement Tuesday.  "In light of current market conditions, we are accelerating the planned actions to reduce costs."  Ericsson's adjusted gross margin fell by 3.4 percentage points from a year earlier to 29.8% in the second quarter, and the company suffered a net loss of 1 billion kronor from a profit of 1.59 billion kronor a year earlier.  Although Gardell has not given much detail on his plans for Ericsson, his liking for asset sales has led to speculation that he may seek more drastic change.

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Proxy Fights Are a Rarity for Peltz's Trian
" Wall Street Journal (07/17/17) Benoit, David"

Trian Fund Management LP made a rare move Monday when it initiated a drive to put co-founder Nelson Peltz on the board of Procter & Gamble Co. (PG)—the biggest company to ever face such a campaign.  Trian does not wage proxy fights often and has tried to avoid the perception that it battles companies, branding itself instead as a "highly engaged shareholder."  It seeks a board seat at nearly all of its companies so that it can access the information only insiders have and can influence the discussion on strategy.  Trian's willingness to work with companies in private has often helped it negotiate its way onto the board instead of fighting for representation.  Since it started in 2005, it has only had two prior proxy fights—with H.J. Heinz Co. (KHC) and DuPont Co. (DD).  In 2006, it acquired a stake in Heinz and sought a seat on the board, triggering a fight.  Trian won two board seats, and afterward, the sides grew close and Heinz CEO William Johnson was put on the board of PepsiCo Inc. (PEP) by Trian.  The victory worked as a stamp of legitimacy for almost a decade: Trian would take big stakes, with companies quickly agreeing to give the firm a board seat.  In 2015, Trian ran a fight against DuPont but narrowly lost to DuPont's successful countercampaign.  Within months, however, DuPont opened back up to Trian helping to structure its pending merger with Dow Chemical Co. (DOW).  P&G seems ready to make a similar case to DuPont's: the board backs CEO David Taylor's plan and does not want to add Peltz because it does not see the need, sources said.

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Strategy for Board Unanimity — The 'Need to Know' for the Lone Activist
" Forbes (07/17/17) Skroupa, Christopher P."

In a minority position on the board, an activist investor needs to gain the support of other directors using a perceptive strategy.  Eric Rosenfeld, CEO and president of Crescendo Partners L.P., suggests some ways to accomplish that goal.  Before the campaign can take flight, he advises, the activist should thoroughly understand the dynamic of the boardroom in order to know what to expect and to effectively plan a strategy for convincing the board.  "The first step is to understand the political forces affecting board dynamics.  It is necessary to understand how and why each board member came onto the board, whether there are different camps on the board, and what are the motivations and alliances of each board member," Rosenfeld reasons.  It also helps to know which directors to target for support.  "The next step is to allay the preconception the board may have that the activist and his or her nominees are reckless and ill informed.  Thorough research, an intimate knowledge of the company and the use of data, including reading past board books, will help," he continues.  "Third, the activist's knowledge of the views of unhappy shareholders can be used to help sway the board's position on different matters."  The activist presumably has gathered significant shareholder support, Rosenfeld notes.  Finally, it is key for the activist to remember that the battle occurs inside the boardroom.  "Fourth, the prospect of another proxy battle may help to influence the views of directors.  Unless change is evident and progress is achieved, the activist may gain more allies on the board in a year or less," he says.

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Hudson's Bay Faces Pressure to Get Out of Retail
" Financial Times (07/17/17) Indap, Sujeet"

Richard Baker, one of the world's savviest property investors, made a splash when his New York investment firm acquired Saks (SKS) for $3 billion in 2013. Baker focuses on acquiring prominent brands that also own most of their physical locations. A year after the Saks purchase, his Hudson's Bay vehicle took out a mortgage on Saks' flagship location on Fifth Avenue in Manhattan that valued the building and land at nearly $3 billion. However, Jonathan Litt—who recently announced a 4% stake in Hudson's Bay—is not impressed. The investor wrote in a letter last month to the board that "the jury still appears out" on Baker's strategy. The share price of Hudson's Bay, listed in Canada, is down 70% in two years as Baker's chains have been pummeled by the decline of traditional retailers. Litt believes that Baker should return to doing what he knows best: being a landlord. In his view, Baker has perhaps the most unique opportunity in retail: the 10 blocks between the Saks and Lord & Taylor stores on Fifth Avenue that attract New York tourists. Litt argues that its real estate portfolio should be worth three times the company's current market capitalization of $C2 billion, and believes that Baker should either take the company private or auction off the best buildings in hopes of attracting a tech company that wants to build its brand. Hudson's Bay has yet to respond to Litt's proposal, but Baker now faces pressure to show his shareholders that he can turn things around.

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Lack of Voting Rights May Keep Snap, Others From MSCI Indexes
" Reuters (07/17/17) Kerber, Ross"

MSCI has proposed leaving shares of companies that lack voting rights out of stock indexes. The proposal is designed "to address the growing concern pertaining to listings of only non-voting shares," according to a paper sent to clients in June. MSCI is seeking feedback. Index providers have been reviewing the issue of whether to include companies with non-voting shares since Snap's (SNAP) initial public offering in March. MSCI's move is similar to the skeptical view that rival FTSE Russell has already put forward, even as some technology firms move in the direction of offering shares with unequal voting rights. S&P Dow Jones also has its own review underway, with decisions due in the coming weeks. Giving shareholders less say over matters like executive pay or board elections will make corporate leaders less accountable, according to critics like big pension funds. "We don't want to kick Google (GOOGL) or Facebook (FB) out of the indexes, it would be way too disruptive," says Ken Bertsch, executive director of the Council of Institutional Investors, a trade group for pension funds and other big investors that has been critical of unequal voting rights. "Our concern is to set a limit on this."

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Four-Year Effort to Allow Universal Proxy Cards for Contested Shareholder Elections Moves Through SEC Channels
" Huffington Post (07/14/17) Anthony, Laura"

An effort in 2013 to mandate the use of universal proxy voting cards in contested shareholder elections may at last be adopted as standard corporate practice, based on an October 2016 amendment issued by the Securities and Exchange Commission.  If adopted, the rule would do away with the practice of requiring shareholders to pick from only one of two proxy voting cards when opposing slates are presented for corporate director elections—a card for the candidates nominated by the company and a card for candidates nominated by opposition shareholders.  Instead, shareholders would be permitted to select from both sides on a universal proxy card.  Opinions vary, with the SEC supporting universal proxy cards as a way to enable shareholders to vote more seamlessly for their preferred candidates. Opponents, though, remain concerned this will embolden shareholder activists and place dissident members on boards.

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