7/10/2025

Standard Investments Halves Stake in Johnson Matthey After Major Overhaul

CNBC (07/10/25) Rao, Ganesh

Standard Investments has halved its stake in London-listed Johnson Matthey (JMAT) after a six-month campaign that forced the British specialty chemicals company into a major overhaul. Standard’s total holding fell to 4.75% from a previously disclosed 9.52%, regulatory filings showed. The investment firm has sold into a share price rally that has recovered to over £18 ($24.50), up more than 35% from a low of around £13.52 when its public pressure campaign began in December 2024. Standard Investments’ remaining position consists of a 1.77% holding in direct shares and nearly 3% held through cash-settled equity swaps, the filing showed. Based in New York, Standard Investments is the investment arm of Standard Industries, a privately held industrial company. The firm derives its credibility in the chemicals sector from its $7 billion takeover of specialty chemicals company W.R. Grace, which it acquired in 2021, part financed by private equity firm Apollo. Standard began agitating late last year, when at the time it was Johnson Matthey’s largest shareholder with an 11% stake. The firm’s co-CEOs, David Millstone and David Winter, published an open letter accusing the board of presiding over “sustained underperformance” that had wiped out shareholder value. They highlighted that investors had lost 53% during the Johnson Matthey chairman’s six-year tenure. The pressure prompted Johnson Matthey to directly address two of the activists’ demands in January, announcing it would form a new board investment committee to oversee “investment strategies and capital allocation” and would cease investing in its Hydrogen Technologies business. A board overhaul followed in February, with chair Patrick Thomas, who was singled out for criticism by the Standard, set to leave in July. In May, the British company announced it had agreed to sell its catalyst technologies business to Honeywell (HON) for £1.8 billion. The company said the deal would create a “highly streamlined group” and would return £1.4 billion of the proceeds to shareholders. Investors welcomed the deal, with shares surging 30% after the announcement. Analysts praised the move, calling it a “surprise value unlock.” “For management who has been under pressure from activists since late 2024, this marks a potential turning point demonstrating strong execution,” Tristan Lamotte, equity analyst at Deutsche Bank, said at the time. The sale price was far above market expectations and prompted analysts at JPMorgan and Berenberg to raise their price targets. “The decision to divest for a multiple higher than the group may not only benefit JMAT’s valuation directly, but it also removes the narrative dissonance caused by growth-oriented and cash-cow businesses being housed in the same company,” said Berenberg’s Sebastian Bray in a note to clients on May 28.

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7/10/2025

Fuji Media Shares Dip After Company Floats Poison Pill Defense

Bloomberg (07/10/25) Furukawa, Yuki; Allan, Gareth

Fuji Media Holdings Inc. (4676) shares fell 4.2% after the broadcaster said it’s considering measures to stop one of Japan’s most prominent activist investors from gaining control of the firm. Since February, the Japanese entertainment and news conglomerate held several meetings with activist investor Yoshiaki Murakami and his daughter Aya Nomura, according to a company statement Thursday. Entities associated with the two have floated the possibility of increasing their combined stake to 33.3%, it said. Such affiliates together held 15.06% as of July 1. Fuji Media said it will consider issuing free stock acquisition rights if an investor buys up 20% or more of its voting shares. The strategy, often referred to as a poison pill, would allow all shareholders to exercise the right to buy more shares, thereby potentially diluting the ownership of large shareholders. Fuji Media denied that this was a poison pill. This week, Reno, a company affiliated with the Murakami Fund, further demanded the Tokyo company consider spinning off a subsidiary that Murakami would take control of, Fuji Media said. The activist group may act to maximize its own interests, rather than the interests of all shareholders, should it gain sway over the broadcaster’s management, Fuji Media said. “This does not leave a good first impression,” said Naoki Fujiwara, senior fund manager at Shinkin Asset Management. The stock price decline reflects fears that the activists’ influence may be diluted, he said, adding that Fuji Media’s move was effectively a poison pill that may be used by management to protect itself. Fuji Media — an entertainment giant that spans TV and satellite broadcasters as well as games and music — has been struggling to recover from a sex assault scandal’s that’s pummeled its reputation and cost it sponsors and viewers. It’s been in a standoff against activist investors including Dalton Investments, which had called for more accountability as well as spinoff of its real estate operations.

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7/10/2025

Autodesk Weighs Takeover of Engineering Software Firm PTC

Bloomberg (07/10/25) Gould, Ryan

Autodesk Inc. (ADSK) is weighing an acquisition of rival engineering-software provider PTC Inc. (PTC), according to people familiar with the matter. Autodesk has been working with advisers to evaluate a cash-and-stock deal for Boston-based PTC, said the people, who asked to not be identified because the matter isn’t public. PTC, with a market value of about $23 billion, is also drawing interest from other industry players, the people said. No final decision has been made and Autodesk could opt against pursuing a deal for PTC, the people added. The deal comes against a backdrop of steady consolidation in the industrial software space, where demand is expected to grow with the increased adoption of artificial intelligence.“Autodesk’s reported interest in manufacturing-software rival PTC is likely driven by a need for scale — a critical factor for maintaining profitability and keeping up with market leaders Dassault Systèmes and Siemens-Altair,” Bloomberg Intelligence analysts Niraj Patel and Maria Beltran said in a research note Thursday. This deal would give Autodesk a 17% share of the $19 billion manufacturing-software market, which would likely not run up against antitrust regulations, they said in a separate note Wednesday. PTC, which rose as much as 19% on the news on Wednesday, fell 7.4% at 10:35 a.m. on Thursday in New York trading Thursday. Autodesk fell 6.9%, giving it a market value of about $61 billion. Founded in the 1980s, PTC’s software helps manufacturers design complex products, including planes, computers and medical devices, according to its website. The company in 2023 bought ServiceMax for $1.46 billion from Silver Lake. That deal brought on current Chief Executive Officer Neil Barua, who replaced James Heppelmann last year. Activist investor Starboard Value built a stake in Autodesk earlier this year and has pushed for changes to the board because of concerns about the software company’s performance and how it handled an accounting probe. Autodesk makes industrial design and operation software, serving industries including architecture, construction, and manufacturing. Analysts at Stifel Financial Corp. said in a research note that it was questionable whether Starboard would support a takeover of PTC, and there are questions of what the potential revenue opportunities and expense savings would be.

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7/9/2025

Pension Funds Managing $575 Billion Flirt With Japan Activism

Bloomberg (07/09/25) Sano, Nao

Japan’s corporate pension funds have over half a trillion dollars parked in global financial assets, but they’ve been called “silent investors” due to their tendency to passively follow managers’ investment decisions. That looks about to change. Pensions are becoming more active in monitoring how their funds are invested by asset managers, in an effort to boost returns. That can be seen in a group formed last August now representing 226 company pension plans to watch over asset managers, called the Corporate Pension Funds Stewardship Initiative. Its members include blue-chip firms like semiconductor-equipment maker Tokyo Electron Ltd. (8035) and convenience store operator Seven & i Holdings Co. (3382), recently a buyout target. “The power of a single corporate pension fund is small,” but as a group they should be able to examine asset managers and seek adequate information to make profitable investments, said Akihiro Nakamura, chief investment officer of Japan’s Pension Fund Association, in an interview. His industry group helped set up the initiative. Having more say is key for corporate pension funds who have had to accept poor performance by their asset managers. Nearly all of them outsource domestic equity investments, and many funds are run by a small staff, giving them little heft in dealing with asset management companies individually. Japan’s about 11,700 retirement funds working as a group would carry a lot of weight, with ¥84 trillion ($575 billion) of total assets, according to a survey by the Life Insurance Association of Japan and others. The pension initiative has been questioning asset management firms about their voting at shareholder meetings and whether they’ve had sufficient dialogue with companies that are investment targets, among other topics. Shareholder meetings in Japan were largely a formality in past decades, with company-sponsored proposals typically gaining near-unanimous approval and those by shareholders being routinely rejected. That’s changing though, with activist investors submitting record numbers of proposals, and some of them have even got the green light. At a shareholder meeting convened by Kobayashi Pharmaceutical Co. (4967) in February this year, Nomura Asset Management voted in favor of board candidates proposed by Oasis Management, though the plan was rejected. In a more dramatic development at Taiyo Holdings Co.’s (4626) annual general meeting in June, the reappointment of then-President Eiji Sato as a director was voted down, an almost unheard of outcome in the past. “Given that the proportion of Japanese equities held by asset managers is rising, their voting power carries increasing weight,” said Naoki Ieiri, chief ESG strategist at Daiwa Securities Co. “It is therefore critically important for asset owners — who sit upstream in the investment chain — to monitor how their voting rights are exercised.”

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7/9/2025

Blackstone, U.S. Equity Funds in Talks to Buy H&R Assets as Activist Investor Presses REIT to Sell

Toronto Globe and Mail (07/09/25) Willis, Andrew; Younglai, Rachelle; Bradshaw, James

U.S. private equity funds and one of Canada’s largest pension plans are in talks to acquire H&R Real Estate Investment Trust (HR-UN) as an activist investor pushes the company to disclose bidders for its $10.5-billion property portfolio. Last Friday, Toronto-based H&R disclosed that since February, it has received multiple proposals to buy all or part of the company, which owns residential, industrial, office and retail properties across Canada and the United States. The REIT’s board appointed a committee to evaluate the offers, advised by bankers and lawyers, but did not disclose the bidders. On Tuesday, K2 & Associates Investment Management Inc. published a press release in which chief investment officer and chairman Shawn Kimel calls on H&R to “immediately disclose the material terms of the viable bids, and to put the best options to unitholders for their approval.” Toronto-based K2 is a significant investor in H&R and staged a successful activist campaign in 2023 to put two trustees on the company’s board. The fund manager said: “Given the REIT’s complex structure, buyers capable of pursuing such a transaction can be hard to come by and K2 would view it as a failure if the board were to fumble this unique opportunity.” Large global real estate funds are circling H&R and attempting to build a consortium that could buy all or parts of the REIT, according to four sources familiar with the process. The REIT has a $3.2-billion market capitalization. New York-based Blackstone Inc., (BX), a significant investor in Canadian apartment buildings and warehouses, is interested in buying H&R’s residential and industrial properties, according to the sources. Blackstone is working in a consortium with another Wall Street investment fund, TPG Inc., that is also a major real estate investor, according to one of the sources. TPG declined to comment. In 2014, H&R struck a partnership on its industrial properties with the Public Sector Pension Investment Board (PSP Investments), based in Montreal, and fund manager Crestpoint Real Estate Investments Ltd., which is headquartered in Toronto. PSP Investments and Crestpoint are in talks to join a consortium bid for H&R and want to continue to own the 50-per-cent stake in the company’s Canadian industrial real estate and 49.5-per-cent holding in the REIT’s U.S. portfolio, according to one of the sources. PSP Investments has $300-billion of assets under management, while Crestpoint oversees $11-billion of investments in more than 300 properties. H&R REIT, K2, Blackstone, PSP Investments and Crestpoint declined to comment on the sales process. On Friday, H&R said in a press release: “There can be no assurance that the special committee’s process will result in any potential transaction.” The price of H&R units jumped by 17% on Friday when the company disclosed it has been in takeover talks since February. In its press release on Tuesday, K2 said: “Five months is more than enough time to surface value. Instead of running a transparent process, the board has decided to keep unitholders completely in the dark about potential paths forward.” H&R hired two investment banks – National Bank Financial and CIBC Capital Markets – and two law firms – Fasken Martineau Dumoulin LLP and Blake Cassels & Graydon LLP – to help the company navigate a potential transaction. On Tuesday, K2 called on the board “to stop spending fees on external advisers who are not accountable to unitholders.” As part of its 2023 campaign for seats on H&R’s board, K2 supported the REIT’s strategy of selling its office and retail real estate. The company is still attempting to unload these properties. Global fund managers have been buying Canadian REITs in recent years, with the pace of deals picking up after the companies’ valuations dropped when interest rates began to rise in March, 2022. Many REITs trade at valuations that are lower than the value of the buildings they own. In 2018, Blackstone teamed up with Ivanhoé Cambridge Inc., a subsidiary of Caisse de dépôt et placement du Québec, to acquire Pure Industrial REIT for $3.8-billion, including debt. In 2022, Blackstone opened an office in Toronto and recruited former Canada Pension Plan Investment Board executive Janice Lin as head of its real estate in Canada. Last year, Blackstone bought Toronto-based apartment owner Tricon Residential Inc. for US$3.5-billion. Blackstone is one of the world’s largest fund managers, overseeing more than US$1-trillion in assets. TPG has US$258-billion of assets under management. In May, the executive chair of InterRent Real Estate Investment Trust, Mike McGahan, offered to acquire the apartment owner for $2-billion, with the backing of Singapore sovereign wealth fund GIC.

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7/8/2025

Activist Investors Set to Push for Changes as Dealmaking Picks Up

Reuters (07/08/25) Herbst-Bayliss, Svea; Farr, Emma-Victoria

Activist shareholders are poised to push harder for corporate changes in the coming months, finding fresh confidence to launch campaigns as the pace of dealmaking picks up again. Bankers, lawyers, and investors forecast a spike in fights over corporate leadership, operational improvements and spin-offs in the second half of 2025. Many global corporations will gird for costly and time-consuming battles, they said, even as some activist investors may be willing to compromise. "Activity in the back half of the year will be more significant," said Alfredo Porretti, global co-head of Shareholder Engagement and M&A Capital Markets at JPMorgan Chase (JPM). "Activists are aiming more carefully but are not pulling the trigger yet." The expected rebound in campaigns at global companies will follow an unusually quiet second quarter when only 59 were launched, including ones at U.S. information technology company Hewlett Packard Enterprise (HPE) and U.S. consumer healthcare company Kenvue (KVUE), which makes Band-Aids and Tylenol. Between April and the end of June, the pace of campaigns where investors push for changes to boost the share price shrank by 16% from a busy first quarter. They were down 32% from a year ago, Barclays' (BARC) data show. Investors said many activists remained on the sidelines in the second quarter, worried about how U.S. President Donald Trump's tariffs and tax policies might affect their proposed strategies to improve corporate performance. "Activists re-evaluated public campaigns in the second quarter given equity market volatility and macro uncertainty but, privately, there were significant levels of agitation through to mid-year," said Pam Codo-Lotti, chief operating officer of Activism and Shareholder Advisory at Goldman Sachs. Looking ahead, both established investors such as Elliott Investment Management, Jana Partners, and Sachem Head Capital Management are reviewing new ideas, as are newcomers who have never tried to publicly prod companies to perform better, people familiar with their work said. Already in the first days of the second half, activist Starboard Value built a stake in online travel company Tripadvisor (TRIP) with plans to engage with management. Activists usually engage companies during the fall and winter months, long before the next year's annual meeting season in the spring. Often they start with private talks before making demands public. Companies are preparing for the expected onslaught. Board members with negative memories of previous activist pressure are pushing management to hire advisers now to assess vulnerabilities and take pre-emptive action, said two directors at large American companies not permitted to discuss the preparations publicly. Long-tenured directors might be replaced or chief executives not keeping pace with peers might be moved out, they said. "In times of economic volatility and uncertainty, shareholder activism is more likely due to weak spots in companies," said Ingo Speich, head of sustainability and corporate governance at German asset manager Deka Investment. "Poor governance is a constant source of shareholder activism. Companies in transition mode are more vulnerable and open windows for shareholders to become more active." So far this year, the favorite demand for activist investors has been a call for board changes, appearing in 43% of campaigns during the first half of 2025. Activist Mantle Ridge successfully pushed for board changes at Air Products and Chemicals (APD) and Elliott did so at Phillips 66 (PSX). Looking ahead, bankers and lawyers expect a pickup in demands for sales of companies or spin-offs, which featured in only 33% of all campaigns in the first half. They pointed to growing investor confidence that the pace of global dealmaking will pick up. "We expect public activist campaigns levels to accelerate in the second half of the year with renewed focus on M&A targets, of course barring macro headwinds," Goldman's Codo-Lotti said. After making a name for themselves years ago with noisy public campaigns waged by investors like Carl Icahn, Bill Ackman, and Daniel Loeb, many activists are now ready to adopt a lower profile and stay out of the headlines, bankers and lawyers said. Institutional investors, who jointly oversee $35 trillion in assets, "overwhelmingly view activism as a useful market force" and 77% see it as a catalyst for change while 71% call it a driver of accountability, according to new research from shareholder advisory firm SquareWell Partners. With their reputations established, activists may be ready to stop short of waging expensive and messy proxy fights, agreeing instead to quiet settlements. For instance, Jana Partners had long pushed French-fry maker Lamb Weston (LW) for operational and board changes and possibly even a sale of the company. In late June, the hedge fund averted a high-profile boardroom fight by scoring a settlement that put four of its candidates on the board and added two that both sides agreed on. "Peace may indeed be breaking out with more settlements reached and board seats going to the activists," JPMorgan's Porretti said, adding "but the settlements are reached only if each side is feeling a little weakness."

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7/7/2025

Dye & Durham Investor Plantro Calls for Special Meeting, Urges Sale of Company

Reuters (07/07/25) Herbst-Bayliss, Svea

Canadian legal software maker Dye & Durham's (DND) second biggest investor, Plantro Ltd, has launched a proxy fight to elect new directors and is pushing for a sale of the company, according to documents seen by Reuters. Plantro Ltd, which owns 11% of Dye & Durham, told the company on Monday that it nominated three director candidates to the 7-person board and that it requisitioned a special meeting where shareholders would vote on the nominees. Its nominees would bring expertise in buying and selling companies, capital allocation, operations, technology and governance, Plantro said. The company nominated industry executives Brian Bidulka, David Danziger, and Martha Vallance, a former chief operating officer at Dye & Durham. It wants them to replace board chair Arnaud Ajdler and directors Tracey Keates and Ritu Khanna. A representative for Dye & Durham did not immediately respond to a request for comment and the three directors could not be immediately reached for comment. The investor, a company controlled by former Dye & Durham CEO Matthew Proud, previously asked Dye & Durham to stabilize its executive ranks, divest the financial services division, and later this year work on selling the remaining core business. Now Plantro is turning up the heat. Selling the financial services unit is not enough to solve the company's problems and the share price would continue to sink if Dye & Durham remained a publicly traded company, it argued. Plantro wants a full sale immediately, arguing this is the only way to realize a control premium for shareholders and restore stability in the business. The stock has lost 42% of its value since January and is worth roughly $488 million. Plantro said new blood is needed in the boardroom because current directors refuse to engage with potential buyers. It also said there are parties that would want to buy the company but did not identify those parties. The company acknowledged in February it had received an unsolicited takeover bid for C$20 a share but it was not engaging with the party. Dye & Durham last year hired Goldman Sachs (GS) as a strategic adviser to review options but in November said it was pausing its review after feedback from shareholders.

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