Media Center

4/18/2024

Activist Investors Urge Nestlé to Reduce Reliance on Sugar, Fat, and Salt

City A.M. (04/18/24) McGuire, Laura

A resolution filed by a group of Nestlé (NSRGY) shareholders will vote today at its AGM, demanding one of the world’s biggest food makers reduce its reliance on products with high levels of sugar, fat, and salt. The resolution was co-filed last month by five institutional investors with $1.68 trillion in assets under management, including Legal and General Investment Management, one of Europe’s largest asset managers. Coordinated by responsible investment charity ShareAction, shareholders have put forward a resolution to the maker of KitKat and Quality Street that aims to move the company away from over-reliance on unhealthy products to healthier eating options. They argue that Nestlé, alongside other large food manufacturers, “risk missing the opportunity to meet growing consumer demand for more healthy products and face increasing regulatory pressure from governments legislating to tackle the rising costs of poor health.” Holly Gabriel, registered nutritionist and consumer health lead at ShareAction, who will attend the AGM on Thursday, said: “While Nestlé made assurances that it would set an ambitious target to improve its healthier food offering, the target it released in September last year was inadequate. “It gives investors no reassurance that sales won't continue to jeopardize public health and expose the company to so much unnecessary risk. The trends that have led to shareholders filing this resolution are not going away, and in fact data suggests they are going to get worse.” Some 70% of Nestlé sales in the UK are from foods that are high in fat, salt and sugar, according to new research by Oxford University and BiteBack. Commenting last month, Maria Larsson Ortino, senior global ESG manager at Legal & General Investment Management (LGIM) said: “There is a clear link between a poor diet and chronic health conditions, such as obesity, heart disease, and diabetes. As a long-term investor, LGIM believes that health care costs and decreased productivity have significant negative consequences on our clients' assets across multiple sectors.” A Nestlé spokesperson, said: “While we share the common goal of increasing the availability of more nutritious foods for consumers around the world, we disagree with the idea of deliberately limiting growth in specific areas of our portfolio, as this would create opportunities for competitors without yielding public health benefits. ShareAction is targeting the wrong company and using figures that suit them."

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4/18/2024

Regulator Calls for Collaboration of Shareholders, Firms

Korea Times (04/18/24)

Lee Bok-hyun, chief of the Financial Supervisory Service (FSS), on Thursday stressed the need for Korean businesses and their shareholders to work together to ensure joint development, saying the government will work to create a virtuous cycle between shareholder activities and business growth. Lee noted that shareholder activism will only continue to grow, but said efforts by shareholders may end in vain unless they are sound and reasonable enough to be supported by other shareholders. The financial regulator said out of 93 agenda items suggested by shareholders at various firms this year, only 30% have been approved. "I ask shareholder activist organizations to actively propose 'long-term growth strategies' to businesses and other shareholders," the FSS chief said in a meeting with officials from activist groups, businesses, and other related organizations. "Unreasonable demands that only seek short-term profits will not only undermine the firms' long-term growth engines but also become an obstacle to the development of the financial market," he added. For businesses, the chief of the financial regulator stressed a need to listen. "To businesses, I ask them to listen to the voice of shareholders and to 'actively react' to just demands of shareholders," Lee told the meeting. "We live in a time where shareholders can directly suggest agendas for shareholder meetings through their smartphone apps. Also, shareholder activism is very likely to expand into various activities, such as calling on firms to fulfill their social responsibilities." Lee's call comes amid government efforts to boost the value of local businesses to end the so-called Korea discount, a phenomenon where local shares are traded lower than their fundamentals. The FSS chief said the government will closely watch future developments in shareholder activities and firms' reactions. "In addition, the financial authorities will work to foster a business-friendly environment to create a 'virtuous cycle' where firms can maximize returns to shareholders through continuous growth and shareholders can reinvest their gains in the firms," said Lee.

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4/18/2024

ValueAct Announces Support for the Substantial Changes in Strategy and Board Leadership Announced by Seven & i

PRNewswire (04/18/24)

ValueAct Capital, which has been a major shareholder of Seven & i Holdings (SVNDY) since 2020, has expressed support for recent announcements by Seven & i. ValueAct supports the recommendations of the Strategy Committee of Seven & i including its conclusion that a separation of 7-Eleven from the Superstore business is in the best long-term interests of both businesses, their employees and shareholders. ValueAct supports the pursuit of an IPO and ultimately the deconsolidation of the Superstore business as one workable option to accomplish this strategic conclusion. ValueAct supports the separation of the Chairman and CEO roles at Seven & i and the appointment of Stephen Dacus, who also chairs the Strategy Committee, as Chairman of the Board. ValueAct will vote in favor of Seven & i's board nominees at the 2024 AGM. ValueAct issued the following statement from Co-CEO Rob Hale: "As long-term shareholders of Seven & i, we are encouraged by the strategic steps and governance changes that the board and management have just announced. We believe these changes will enhance shareholder value and strengthen both the global 7-Eleven franchise and the Superstore business. It is a wise decision to separate the Chairman and CEO roles as a corporate governance best practice. Furthermore, we believe the appointment of Mr. Dacus as Chairman of the Board is a logical step to ensure the Strategy Committee's recommendations will be carried out."

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4/18/2024

TIM Denies Bluebell Capital Complaint About Board Pacts Ahead of AGM

Telecompaper (04/18/24)

Telecom Italia (TIIAY) has strongly disavowed a complaint about the existence of “hidden pacts” between the company and shareholders on the outgoing board's slate from investor Bluebell Capital. Shareholders are due to vote next week on whether to support current chief executive officer Pietro Labriola for another three-year mandate or competing slates from investors Bluebell and Merlyn. In a statement, TIM said Bluebell’s allegations are “serious and unfounded,” adding that it will immediately move to take the appropriate initiatives and steps to protect share prices, including legal action if needed. For now, it has filed a complaint with markets watchdog Consob and said that “the board’s slate preparation and related interlocutions with shareholders or associations representing them were duly documented, and ample and timely information was provided to the market.” Bluebell Capital Partners has reportedly proposed former Google executive Laurence Lafont as the company’s new chief executive officer and urged a review of the decision to sell TIM’s fixed network infrastructure (NetCo) to U.S. fund KKR.

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4/18/2024

Norway Wealth Fund to Back New Mandate for Telecom Italia CEO

ET Telecom (04/18/24)

Norges Bank, a shareholder of Telecom Italia, intends to support another mandate for the phone group's chief executive officer, Pietro Labriola, in an April 23 vote to renew the board. A document on Norges Bank's website indicated it would back the slate of candidates put forth by the outgoing board at TIM's annual general meeting next week. Investors Bluebell and Merlyn have offered competing slates of candidates as Labriola seeks a second term. Norges Bank has a 3.6% stake in TIM and is the company's third-biggest shareholder, according to LSEG data.

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4/18/2024

Land & Buildings Issues Letter to Shareholders of National Health Investors Announcing Its Intention to Vote Against Two Directors at 2024 Annual Meeting

Business Wire (04/18/24)

An investor group led by Land & Buildings Investment Management intends to vote against National Health Investors (NHI) incumbent directors Robert Webb and Charlotte Swafford at the health care real estate investment trust's upcoming annual meeting, according to Land & Buildings and its affiliates. The investor group is a significant shareholder of National Health Investors, the open letter says. Land & Buildings and affiliates believe the health care REIT possesses valuable assets but that it is significantly undervalued in large part due to the company's poor corporate governance practices and web of interlocking relationships and conflicts of interest among members of the board of directors. The letter says the investor group expressed its concerns to the board that the status quo is not tolerable, adding that it demanded objective and independent decision-making from directors. Moreover, Land & Buildings and its affiliates noted that National Health Investors faces a critical opportunity to unlock value in connection with its upcoming lease renewal with one of its largest tenants, National HealthCare (NHC). However, the board does not appear to share the severity of their concerns, the letter says. As a result, the investor group is urging fellow shareholders to join it in voting against Webb and Swafford.

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4/17/2024

Southwest Gas Unit Gets $314.8 Million From IPO, Icahn Deal

Bloomberg (04/17/24) Or, Amy

Centuri Holdings Inc., the infrastructure services business of power company Southwest Gas Holdings Inc. (SWX), raised approximately $314.8 million in an initial public offering and concurrent private placement priced at the top of a marketed range. Centuri sold 12.4 million shares for $21 each on Wednesday, according to a statement. Investment funds backed by Carl Icahn agreed to purchase about 2.6 million shares in a concurrent private placement. The pricing gives the Phoenix-based business a market value of $1.8 billion based on the outstanding shares in its filings with the US Securities and Exchange Commission. The company had marketed the shares for $18 to $21 each. Southwest Gas said in 2022 that it would spin off the unit to better focus on its regulated natural gas business, after reaching a settlement with Icahn, who had objected to an acquisition it had made. Icahn Enterprises LP owns about 15% of Southwest Gas, data compiled by Bloomberg show. Centuri provides services to natural gas distribution and electric utilities, according to the filings. The company has about 12,500 employees and serves 43 U.S. states as well as two Canadian provinces. The company lost $186 million on $2.9 billion in revenue in the year ending Dec. 31, versus a net loss of $168 million on $2.8 billion of revenue in the previous fiscal year, the filings show. Centuri intends to use the proceeds to repay debt, cover expenses from the offering and for general corporate and working capital purposes. Centuri’s shares are expected to begin trading Thursday on the New York Stock Exchange under the symbol CTRI.

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4/17/2024

Virtual Investor Meetings are Eroding Shareholder Rights, Advocates Warn

Toronto Globe & Mail (04/17/24) Berkow, Jameson

Dozens of Canada’s largest investors are urging public companies to preserve their in-person annual general meetings, warning that the shift to virtual-only formats allows management teams to silence dissent. In an open letter being sent to members of the S&P/TSX 60 Index on Thursday, a group of 38 institutional investors, advisers, portfolio managers and non-profits representing a combined $1.7-trillion in assets under management and advisory say virtual-meeting procedures are undermining shareholder rights. Proponents argue that virtual meetings save money and allow more shareholders to participate. However, the British Columbia General Employees’ Union (BCGEU) — which coordinated the letter — argues that virtual-only meetings give management teams the power to cherry pick which questions they want to answer or even edit the wording of questions. “Virtual shareholder meetings are poised to remain a key aspect of the corporate landscape,” the investor letter states. “In theory, virtual meetings present the opportunity for a larger number of shareholders to engage in constructive dialogue with issuers. However, the shift to virtual-only meetings has not enriched shareholder democracy. In fact, it has eroded it.” Virtual-only AGMs are relatively new, having been almost non-existent prior to the public health restrictions introduced early in the COVID-19 pandemic. Yet despite those restrictions being lifted, the trend toward this type of meeting has continued to accelerate. According to data collected by Amandeep Sandhu of Sandhu ESG Law, 57% of TSX-60 constituent companies held virtual-only meetings during the 2023 proxy season, up from 54% in 2020. That number was zero as recently as 2019. There have been 12 shareholder resolutions put on the ballot at AGMs so far this year calling for companies to commit to maintaining an in-person component for their future meetings. Most have either passed or received support from at least 45% of shareholders despite several instances where a company’s board of directors recommended voting against those resolutions. “You have to keep in mind that it is rare for shareholder proposals in Canada to receive majority support,” said John Vizikas, associate director and head of Canada research for proxy advisory firm Institutional Shareholder Services. “Last year, only one received majority support and that one was also supported by management.” Proxy advisory firms Glass Lewis and ISS are both broadly supportive of efforts to ensure AGMs continue to have an in-person component. ISS has supported all 12 resolutions made so far this year and Glass Lewis even includes supportive language in its Canadian benchmark policy guidelines for 2024. Regulators, meanwhile, have struggled to ensure companies holding virtual-only AGMs offer the same level of access for shareholders as they would expect from an in-person meeting.

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4/17/2024

Engine Capital Backs Call for Parkland Review, Including Sale

Reuters (04/17/24) Dareen, Seher

Engine Capital on April 17 supported biggest shareholder Simpson Oil's call to put Canadian fuel distributor Parkland Corp (PKIUF) on the block as part of a strategic review, saying a sale would lead to greater value. Simpson Oil, which holds a 19.7% stake in Parkland, had urged a strategic review earlier in April. The call was spurned by Parkland, saying it did not consider a strategic review necessary and in the best interests of the majority of its shareholders. Engine Capital, which has a 2.5% stake in Parkland, said it anticipates any possible deal to be priced at C$64 a share. The implied value would be a premium of about 49% to Parkland's last close, according to Reuters calculations. "We believe a sale of the Company (in one or multiple transactions) is likely to result in a transaction at a price that is superior to the present value of the current strategic plan," Engine Capital said in a press release. In January, Engine Capital also had requested the refreshment of Parkland's board, saying it was concerned about the departures of Simpson Oil board members Marc Halley and Michael Christiansen, after being directors for eight months.

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