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9/15/2025

Swiss Regulators Accused of Pushing UBS Out of the Country

finews.asia (09/15/25)

Switzerland’s government, central bank, and financial regulator are under fire, as Cevian co-founder Lars Förberg accuses them of trying to drive UBS (UBSG) out of the country. Meanwhile, UBS executives have reportedly held talks in the US about a potential strategic shift. "The Federal Council, the SNB, and Finma are full of smart people. They are well aware that the proposed extreme capital requirements would compel UBS to leave. They just don’t want to say it out loud," Lars Förberg told the NZZ am Sonntag. Förberg’s attack is not without self-interest: Cevian is one of UBS’s investors. He argues that the proposed regulations squander UBS’s strong position. To remain competitive, the bank’s only option would be to switch regulators – in other words, to leave Switzerland. Ensuring competitiveness, he stresses, is the duty of every board of directors. Cevian has calculated the cost of the tougher capital rules. The conclusion: the additional requirements would lead to annual capital costs of $6.5 billion, equivalent to 20% of UBS’s total costs. Förberg likens the measures to tariffs: "Unlike, say, the 39% U.S. tariffs on Swiss goods, these rules target UBS alone, as the only bank in the world affected. That massively undermines its competitiveness. We all complain about U.S. tariffs, yet at the same time we’re shooting ourselves in the foot by deliberately crippling our biggest bank’s global competitiveness." Just last Monday, Switzerland’s lower house rejected a motion that would have delayed debate on stricter capital rules. That would have helped UBS in the short term by sparing it from having to cut dividends and buybacks. Förberg, who has also invested in Baloise, already voiced his concerns in February about a drastic tightening of capital requirements, as reported by finews.ch. But he insists he is not opposed to stronger banking oversight in Switzerland as such. Meanwhile, the New York Post reported that UBS leaders met with officials in Donald Trump’s administration. The topic: how to counter Switzerland’s tougher capital requirements, possibly through a strategic shift. Options reportedly under discussion include acquiring a U.S. bank or pursuing a merger, according to unidentified sources cited by the newspaper.

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9/15/2025

Exxon to Offer Auto-voting to Counter Shareholder Activism

Reuters (09/15/25) Dang, Sheila; Kerber, Ross

Exxon Mobil (XOM) is introducing a unique shareholder voting mechanism that will allow retail investors to automatically cast ballots in step with board recommendations during annual meetings, a move that may help the top U.S. oil producer fend off activist campaigns. On Monday, the U.S. Securities and Exchange Commission said in a letter that it would not object to the plan from Exxon as long as the company met certain conditions, including providing annual reminders to investors who opted into the mechanism about their participation. The SEC's response could prompt other companies to follow suit. The oil major has fought back aggressively against activists in recent years, and could shore up more support from its unusually large base of retail shareholders - who typically have lower turnout rates but vote overwhelmingly in support of Exxon's board. Individual investors currently "lack access to numerous services that make voting fast and easy for larger institutional investors. Activist groups often exploit this gap to push political goals at the expense of shareholder value," Exxon said in a statement. In the coming weeks, retail investors will be notified through their brokerages that they can enroll in a free program to vote their shares in line with management recommendations, Exxon said in a statement. If investors change their minds, they can override the program and cast their votes manually according to instructions in the proxy materials. Exxon said it is the first U.S. company to offer such an option. "As a matter of fairness, it's time to level the playing field," the company said. Nearly 40% of the company's shares are held by individuals but just a quarter of them vote during proxy season, though they mostly support the board, Exxon said. Retail investors hold about 30% of most large U.S. companies. They are a sought-after pool when companies face close board elections or campaigns for ideologically charged shareholder resolutions. Only a few other iconic U.S. brands approach Exxon's level of retail ownership, including Apple (AAPL) and Tesla (TSLA). Exxon has faced several high-profile activist shareholder campaigns tied to climate issues in recent years, notably in 2021 when three dissident directors were elected to its board. Last year, it continued to pursue litigation against activist investors Arjuna Capital and Follow This, even after the groups withdrew their proposal calling on Exxon to cut its greenhouse gas emissions. In a statement in May last year after a judge dismissed Exxon's lawsuit against Follow This, founder Mark van Baal said Exxon was attacking the rights of all shareholders to put forth proposals about emissions, the cause of climate change. Exxon's most recent annual meeting in May featured no qualifying shareholder resolutions for the first time since 1958, following its aggressive campaign against resolution-filers. In the statement, Exxon noted a number of top fund managers have created similar options allowing their investors to vote with corporate boards, although the fund firms also allow users to select other policies like choices that support more climate and social measures. During an energy conference in Austin on Friday, Exxon CEO Darren Woods said the company wanted to stop activists from submitting the same proposal year after year. "My view is, if you're going to play that game, we can play too," Woods said.

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9/14/2025

Boohoo Faces Showdown at Shareholder Meeting

The Telegraph (U.K.) (09/14/25) Boland, Hannah

Boohoo (DEBS) is facing mounting pressure ahead of its shareholder meeting this week, after two leading proxy advisers urged investors to reject its executive pay report. Institutional Shareholder Services (ISS) and Glass Lewis both raised concerns over what they described as a “lack of clarity” in the company’s remuneration policies, particularly around a bonus package for chief executive Dan Finley. Finley, who took charge in November after leading Boohoo’s Debenhams division, was awarded a package worth more than £2m in cash and shares. ISS said Boohoo had failed to explain whether the award was equivalent to compensation forfeited from his previous role. The advisers also questioned discretionary bonuses given to other executives, with Glass Lewis warning they reflected “a lack of resolve” to properly link pay to performance. The dispute comes as Boohoo battles its largest investor, Mike Ashley’s Frasers Group, which has accused chairman Tim Morris of pursuing financing arrangements against shareholders’ best interests. Frasers has already attempted to oust Morris and previously sought to install Ashley as chief executive, arguing he could reverse Boohoo’s slump. Shares in the group, which is now repositioning under the Debenhams name, have fallen almost 90% over the past five years, while the company reported record losses of £348m last year. Boohoo said its remuneration policy was designed to attract and retain leadership during a multi-year turnaround, stressing that both ISS and Glass Lewis had backed binding resolutions despite concerns about pay. Shareholders will vote on the proposals Thursday.

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9/13/2025

Sachem Head is Pushing for a Performance Food Merger. Here’s Why a Deal Makes Sense

CNBC (09/13/25) Squire, Kenneth

The food and foodservice distribution company Performance Food Group (PFGC) has a stock market value of $16.34 billion ($104.40 per share). On Aug. 21, Sachem Head Capital Management, which has a stake in the company of between approximately 2% and 4%, delivered a nomination notice for the following four candidates to stand for election to Performance Food Group's Board at the 2025 Annual Meeting: Scott D. Ferguson, David A. Toy, R. Chris Kreidler, and Karen M. King. Additionally, Sachem Head has urged the company to explore a potential business combination with US Foods (USFD) and, absent a transaction, further improve margins. Ferguson and Toy previously served together on the US Foods board as part of a Sachem Head Cooperation Agreement. At US Foods, Sachem Head helped install a new CEO and management team, which catalyzed a successful turnaround for the company. Since Sachem Head filed its 13D at US Foods, the company's stock has more than doubled. While there is an opportunity to improve operating margins at the company, the main catalyst here is the merger with US Foods. The potential synergies that could be attained in such a combination make it very hard to ignore. These synergies are evident from another proposed industry consolidation, Sysco's 2013 attempt to merge with US Foods. Publicly, this deal was projected to deliver annual synergies of at least $600 million within three to four years relative to US Foods' $826 million of EBITDA at the time. In other words, the projected synergies represented more than 70% of US Foods' EBITDA, and the numbers that were thrown around privately were even larger. This is an extraordinary figure, and largely unique to the food distribution landscape and the amount of purchasing, logistics and warehouse rationalization synergies that these companies have. Extrapolating these numbers to a US Foods/PFG merger and applying similar levels of synergies using the EBITDA of PFG's foodservice segment ($1.2 billion), which holds most of the synergistic potential, a merger could be expected to yield $800 million to upwards of $1 billion in synergies. Moreover, if there is anyone who could validate this analysis, it would be Sachem director nominee Chris Kreidler, who was the CFO of Sysco at the time. However, the Sysco/US Foods deal was ultimately blocked by the Federal Trade Commission due to antitrust concerns centered around a merger of #1 and #2 that would eliminate Sysco's only national competitor. There are a few reasons why a merger between US Food and Performance Food Group may have a different outcome. First, this would be a merger of the second and third largest players, rather than first and second; and unlike Sysco, PFG is not a national competitor, with little to no footprint on the West Coast. Additionally, today's regulatory environment under the Trump administration is significantly more favorable than it was when the Sysco deal was reviewed under the Obama administration. While any approved deal would likely require divestitures in certain markets and there is no guarantee of an approval, with potential synergies like this, the Board owes it to its shareholders to at least explore the possibility of a US Food merger. And that is all Sachem Head is asking. They are not forcing the company to sell but rather pleading with them to evaluate this potentially lucrative opportunity that has been brought to them. In July 2025, US Foods confirmed in an 8-K filing that they had approached PFG about a potential combination. But so far, PFG has not meaningfully engaged with them. Given this current sentiment, sincere consideration of this transaction appears unlikely to occur without asserting a little pressure on the board, and Sachem Head is doing that in the form of a threatened proxy fight that they would have an excellent chance of winning. Not only are proxy fights about the power of the argument, and Sachem Head has a great one here, but the company's shareholder base contains many alternative asset managers that are more likely to support an activist agenda like this than the traditional index funds. These shareholders have a history of being receptive to good activist campaigns and the potential upside this plan could deliver and would also be impressed by the strong slate Sachem Head is nominating should be enough for them to hear the fund out. Moreover, there is speculation that even prior to Sachem Head's engagement, changes in the C-Suite were imminent. For more than 17 years, the company has been run by CEO George Holm, a widely respected industry leader. Now, it has been rumored that Holm will soon step down, likely to be replaced by the company's President Scott E. McPherson. A CEO transition like this creates the perfect time for a strategic transaction for everyone involved, except maybe McPherson. When two companies of similar size merge in a merger of equals, valuation is often the easy part. It is the social issues that are often the dealbreakers. And that dynamic could be exacerbated when the merger is proposed just as the sitting president is finally getting the call up to CEO. However, McPherson hasn't been a PFG lifer and has only been with the company for a year and a half, so the social issues surrounding leadership of the surviving entity should be achievable. Kenneth Squire, founder and president of 13D Monitor, expects that an experienced activist like Sachem Head will be able to convince the board of this and a great outcome for shareholders would be a settlement to add two to three directors to the board along with the establishment of a new committee focused on evaluating strategic alternatives with at least one of the new directors on that committee. That could lead to a transaction that could be a windfall for everyone involved. "But if ultimately an evaluation is done and a standalone path is determined to be the best outcome, this remains a strong company and a high return on capital business with room to improve on costs and margins around the edges," Squire concludes, "areas which Sachem Head's directors would also be valuable.

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9/12/2025

Tarsadia Pushes Sunstone REIT to Pursue Sale, or Liquidate Assets

Reuters (09/12/25) Herbst-Bayliss, Svea

Tarsadia Capital wants Sunstone Hotel Investors (SHO), which owns prominent properties from Massachusetts to Maui, to sell itself or liquidate its assets. The asset manager, which invests on behalf of a wealthy family and owns 3.4% of the real estate investment trust's stock, is pushing for a two-pronged process and also wants Sunstone to appoint new directors to its eight-member board who have been vetted by Tarsadia. If the board does nothing, Tarsadia warned it may launch a fight for board seats later this year. "Sunstone’s current trajectory as a subscale lodging REIT is simply not tenable," Tarsadia wrote to the board. "The Board needs immediate refreshment and must commence a robust strategic alternatives process to unlock value for shareholders." Tarsadia traditionally does not call for its portfolio companies to pursue dramatic changes like a sale or liquidation. But after months of constructive conversation with Sunstone's management and board and visiting all of the company's properties, it is dialing up the pressure now after hitting an impasse in negotiations, two people familiar with Tarsadia said. The firm sees no path forward for the company in its current state and senses an industry inflection point with more buying and selling ahead, especially after lodging REIT Braemar Hotels & Resorts (BHR.N) last month announced a sales process, the letter said. Sunstone did not immediately respond to a request for comment. The company's biggest problem, Tarsadia said, is that its portfolio, which includes the Marriott Boston Long Wharf, the Four Seasons Napa Valley, the Hilton San Diego Bayfront, and the Wailea Beach Resort, is too small and therefore not fully attractive to public market investors. There are 14 properties, down from a peak of 60 in 2005. Since its public listing in 2004, Sunstone's stock price has tumbled 44%, leaving it with a market value of $1.8 billion. Its biggest REIT competitor Host Hotels & Resorts (HST) owns 80 hotels, is valued at $12 billion and returned 20% since 2004. The small number of properties leaves Sunstone exposed to weather events like storms or wildfires or a hotel renovation that could substantially hurt earnings, Tarsadia said. Sunstone's second-quarter 2025 earnings were mixed with strong revenue but a miss on its earnings per share. The properties are uneven earners with the top seven properties bringing in 85% of total earnings. The Hilton San Diego Bayfront, located a short walk from the city's convention center, contributes roughly one-fifth of earnings. Competitor REITs have significantly more diversified portfolios with their top seven properties bringing in between 31% and 61% of earnings, Tarsadia said.

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9/11/2025

Bill CEO Defends Performance

Payments Dive (09/11/25) Bachman, Justin

Bill Holdings’ (BILL) founder and chief executive on Wednesday defended his company’s performance as two activist hedge funds call for change at the payments and accounting software firm. “The board has always actively thought about shareholder value and how you create more shareholder value,” Bill CEO René Lacerte said at an investor conference, adding later in the discussion that “the DNA of the company” is focused on growth and profits. Lacerte declined to directly address the recent 8.5% stake taken by Starboard Value, which aims to add directors to the company’s board. He also sidestepped commenting on the stake of at least 5% acquired by Elliott Investment Management. The CEO listed several Bill accomplishments in recent years, including a doubling of revenue and non-GAAP profits over the past three years and increasing investments to spur company growth. On a GAAP basis, Bill posted a $24 million net profit last month for its 2025 fiscal year, following three years of losses totaling $579 million. Bill, based in San Jose, California, sells to small and midsized businesses, including about 9,000 accounting firms. The company is seeking to better monetize its current client base and to extend its 10 payments products into more companies. “We have a massive opportunity,” Lacerte said, citing only a current 4% market penetration among SMBs. Bill also has “significant opportunities to increase both the penetration of our payment products across our customer base” and to increase customer growth, he said at the Goldman Sachs Communicaopia + Technology Conference. Bill shares have declined 37% this year and sit about 85% below their $342 peak in November 2021. Bill’s board authorized a new $300 million share repurchase program last month, atop $100 million in shares the company has repurchased so far in 2025. Bill’s revenue growth has been pressured recently as its small and mid-sized business customers have faced financial uncertainty due to the Trump administration’s tariffs and an unclear outlook for the U.S. economy, the company’s executives noted last month. Bill has also faced increased competition from multiple payments rivals, including Intuit and Tipalti. A third of Bill’s 12 directors’ terms expire this year, according to the company’s 2024 proxy filing. Starboard plans to nominate several new directors, the hedge fund said last week in its securities disclosure.

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9/11/2025

CSX to Reopen Howard Street Tunnel and Blue Ridge Sub Ahead of Schedule

Trains (09/11/25) Stephens, Bill

CSX Corp. (CSX) plans to resume operations through the Howard Street Tunnel and over its hurricane-damaged Blue Ridge Subdivision ahead of schedule, CEO Joe Hinrichs said today. Trains will begin running through the Howard Street Tunnel in Baltimore during the last week of September. The tunnel on CSX’s I-95 corridor has been closed since Feb. 1 for a long-awaited double-stack clearance project that was expected to take up to 10 months. “We’re going to beat the clock on that. We’re really excited about it. ?The team’s done a fabulous job,” Hinrichs told an investor conference. The hurricane-damaged Blue Ridge Sub — the former Clinchfield Railroad through rugged eastern Tennessee and western North Carolina — will reopen during the first week of October after completion of a massive $450 million rebuilding project. CSX had previously said it expected to reopen the line late in the fourth quarter or early in the first quarter of next year. Nearly 60 miles of the route were wiped off the map due to flooding caused by Hurricane Helene last October. The reopening of the tunnel and Blue Ridge Sub will enable CSX to avoid the $10 million monthly cost of detouring traffic around the closures. It will also make the railroad more resilient, Hinrichs said, because all four of its north-south routes will be open. While the Howard Street Tunnel itself will be fully cleared for domestic double stack trains when it reopens, work remains on two overpasses in Baltimore. Once those are complete by the second quarter of 2026, CSX will be able to offer double-stack service in the I-95 corridor for the first time. It also will be able to shift stack trains linking the Midwest and Baltimore to the direct route over the former Baltimore & Ohio main line via Pittsburgh rather than the current roundabout detour through New York state, New Jersey, and Philadelphia. The line closures and detours exacerbated congestion that had been building on the railroad since hurricanes Milton and Helene struck the Southeast just 13 days apart last fall. Service suffered, particularly from February through April. But by May the railroad had bounced back. The deterioration in CSX’s operating metrics and its financial performance prompted sharp criticism from activist investor Ancora Holdings in July. Last month the hedge fund called on the CSX board to replace Hinrichs as part of a management overhaul. Ancora claimed that the railroad’s performance slipped under Hinrichs, who became CEO in September 2022. Prior to his tenure, Chadwick notes, CSX had a sub-60% operating ratio. Today CSX’s 64.1% operating ratio trails the other four publicly traded Class I railroads. Without mentioning Ancora, Hinrichs today defended CSX’s performance. “We’re having a very strong third quarter operationally,” he said. “Essentially, from the beginning of May on, our railroad’s running about as well as it ever has, and you can see it in the metrics.” For the third quarter, train velocity, terminal dwell, trip plan compliance, and the number of cars online are all outperforming the railroad’s averages since 2021. “This is really important because this is all happening before we open up … the big projects we’re working on,” Hinrichs said. “So it shows you the capability of our network, even without those relief valves.” A number of factors contributed to a reduction of operating income from a 2022 peak of $5.95 billion, Hinrichs said. In 2022, CSX benefitted from high export coal revenue, fuel pricing, and unusually high intermodal storage revenue and real estate sales. Lower export coal volume and revenue, unfavorable diesel prices, and normal storage and real estate revenue have all contributed to a $1.2 billion decline in operating income over the 12 months ending June 30 compared to 2022, Hinrichs said. Also contributing: Costs related to congestion and detours. “We should get back to stronger earnings when some of those things aren't going against us on an annual basis,” Hinrichs said. CSX also is banking on increased merchandise volume from a number of industrial development projects that are coming online next year and in 2027. The railroad also expects the Howard Street Tunnel project to divert up to 125,000 truckloads to intermodal annually.

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9/11/2025

Shareholder Democracy Enters its Disney-princess-BuzzFeed-quiz Era

Semafor (09/11/25) Goswami, Rohan

The trillions of dollars managed by BlackRock (BLK), State Street (STT), and Vanguard gave them huge power over corporate America. Retreating from political criticism, they’re trying to give it up to everyday investors. The Big Three investment firms have rolled out programs over the past three years that let individual investors vote their own shares in corporate elections, rather than governance experts at HQ. Clients can choose “archetypes” — pro-environment, deferential to management, socially-minded — that distill their stances, and then automatically vote accordingly on ballot measures. Vanguard on Wednesday said that the number of investors opting into their program had more than doubled from 2023 to 2024. State Street and BlackRock have had similar uptake to their own programs. “It’s giving voice to investors that have a perspective,” John Galloway, global head of investment stewardship at Vanguard, told Semafor. A side benefit is reducing the power of these firms, which is both real — BlackRock, Vanguard, and State Street together control around 20% of the average S&P 500 company — and magnified by conservatives who see a vast left-wing conspiracy in corporate boardrooms. The challenge is getting investors to care. Vanguard has more than 50 million investors on their platform, 10 million of whom are eligible for its Investor Choice program. Just 82,000 of them opted to control their votes in 2024. Getting shareholders to “open up an email [informing them about voting choice], understand what you’re even talking about, and then make a decision” is an uphill battle, said Alex Thaler, CEO of Iconik, a startup that offers default profiles as well as interactive questions — a shareholder democracy version of BuzzFeed’s “which Disney princess are you?” quizzes. Vanguard and other investment firms are still building out the technology to make more investors eligible: Currently, a little more than 26% of BlackRock’s $12.5 trillion in assets qualify. The question of which individual investor owns which share of which company is surprisingly murky, an artifact of arcane market plumbing made more difficult by the rise of ETFs and fractional share ownership. Galloway says Vanguard is three to five years away from perfecting the system. Another challenge is parsing millions of pages of corporate documents to figure out what shareholders are actually being asked to decide. “Maybe I want to follow this person’s policy, or this policy that’s already set up by a nonprofit, or maybe it’s Vanguard[’s house policy], Thaler said. “Or I want to follow parts of that policy, but I also want to have my own rules.” A world in which BlackRock and Vanguard’s power is dispersed to millions of individual investors could upend how activist board battles are waged. Their ability to swing elections brings some efficiency to proxy battles, corralling the efforts of corporate management and the hedge funds trying to pressure them, and winning over the Big Three is usually enough for either side to secure victory. Activists, fairly or not, perceive those big passives as in favor of management. Putting the voting power back in the hands of shareholders — where it arguably belongs, and where passive giants might prefer, for political reasons, that it rests — will fragment the fight for corporate influence and make those battles more expensive. Disney (DIS) and Nelson Peltz spent tens of millions of dollars on old-school mailers, phone calls, and advertisements trying to win over individual investors, a large block of the House of Mouse’s shareholder base. "I can categorically reject the assertion that there is some kind of blanket approach [to supporting companies over activists],” Galloway told Semafor. “We look at each [proxy fight] independently. ... Activists are a really important part of a corporate governance ecosystem,” he noted.

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9/11/2025

AVI Poised to Boost Holdings of Japan Small-Cap Shares

Bloomberg (09/11/25) Tsutsumi, Kentaro

Activist Asset Value Investors Ltd. (AVI) plans to add stakes in Japanese small- and mid-cap companies once it gains more firepower from a planned merger of one of its investment trusts. The London-based firm will expand its positions in Japanese companies by at least about ¥25 billion ($170 million) shortly after the AVI Japan Opportunity Trust and Fidelity Japan Trust combine, managing director Nicola Takada Wood said in an interview last week. AVI has been increasing its presence in Japan in recent years with successful campaigns including one that led to the ending of a parent-child listing at Toyota Industries Corp. (6201). The plan underscores AVI’s conviction that Japan’s corporate governance reforms will touch more firms, and especially smaller ones. It’s another example of how activists are shaking up corporate Japan as they plow capital into the country given the Tokyo bourse’s push for firms to raise their enterprise value. These reforms are creating a “once-in-a-career opportunity,” and there is still a lot more room for improvement in small- and mid-caps, Takada Wood said. The potential investment may give more momentum to still-undervalued smaller Japanese stocks. The Topix Small Value and Topix Mid400 Value indexes have both risen around 20% this year, beating the Topix benchmark’s 13% gain, supported by expectations for governance reforms and less concern about US tariffs. AVI’s targets in Japan usually have net cash and securities greater than 30% of their market capitalization, according to its website. As of August, its holdings included civil engineering firm Raito Kogyo Co. (1926), Rohto Pharmaceutical Co. (4527), and textile maker Kurabo Industries Ltd. (3106). The firm will utilize its expanded Japan assets in “a combination of adding to the existing portfolio and also finding new positions” within a few weeks of the merger, Takada Wood said. “Maybe two or three” new names will be added to the fund’s current 21 firms, including some small-cap candidates, she added. The consolidation of the two funds should be completed by the end of November, according to an announcement last month giving details of the rollover of Fidelity Japan assets into AVI Japan, which is conditional on approvals from shareholders and authorities. Once the transaction goes through, AVI Japan’s net assets will rise about 50% to around £370 million ($500 million) and most of the transfer will be in cash or cash equivalents, Takada Wood said. In a sign of the growing influence of activist investors in Japan, the number of Japanese firms where shareholder proposals have been approved is gradually rising and reached seven this year, according to data from Mitsubishi UFJ Trust & Banking Corp. That included AVI’s proposal to Eiken Chemical Co. (4549) regarding dividends, which got approval in June. The fund merger will create more influence for AVI, and “we can enhance our engagement effort and returns,” Takada Wood said.

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