13D Monitor

A new searchable database featuring the comprehensive voting records of all top institutional investors. This includes every proposal that was up for a vote and how the investor voted.

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13D Monitor | In The Media

1/22/2018

CNBC Interview: 2017 Activism Recap and a 2018 Forecast

CNBC

CNBC's David Faber takes a closer look at the Activism in 2017 and what to expect in 2018. With Ken Squire, 13D Monitor founder.

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9/20/2017

Bill Ackman on 13D Monitor

CNBC

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8/4/2017

Bill Ackman looks at a company's potential: 13D Monitor's Ken Squire

CNBC

Jeff Sonnenfeld, Yale School of Management, and Ken Squire, 13D Monitor founder, discuss Pershing Square's Bill Ackman's interest in pursuing a stake and board seats in ADP.

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Acacia Investor Odey to Back Barrick's Final Offer

Reuters (07/22/19) Hussain, Noor Zainab

Odey Asset Management said July 22 that it plans to vote, on behalf of its clients, in support of Barrick Gold Corp.'s final offer to buy out its fellow shareholders in Acacia Mining. The support comes after Odey said in June that it would reject any offer from Barrick for its stake in Acacia that is framed as "best and final." Odey has a 2.31% stake in Acacia.

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7/20/2019

Crane Gets Two-Thirds of Circor Shares but Offer Still Failed

Bloomberg (07/20/19) Baker, Liana

Crane Co. (CR) has failed in its attempt to buy rival industrial company Circor International Inc. (CIR). Although a majority of Circor shareholders tendered their shares, the offer failed because it didn't meet certain conditions, which included Circor entering into a merger agreement with Crane. The news came after Gamco Investors Inc., Circor's largest investor with 14.4%, said it would tender its shares to Crane, in which it is also an investor. Earlier this month, Crane raised an initial offer by about 6.7%, which Circor rejected, saying it undervalued the company. A deal is unlikely, as Crane will not raise its bid any further and let the offer expire after Circor refused to engage.

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7/19/2019

Carl Icahn Takes Steps to Replace Four Occidental Petroleum Directors

Wall Street Journal (07/19/19) Chaturvedi, Saurabh

Carl Icahn has filed a formal solicitation statement with the Securities and Exchange Commission, one more step in his drive to replace four directors at Occidental Petroleum Corp. (OXY). Icahn, who has approximately a 5% stake in the company, alleges that its board of directors mismanaged its $38 billion deal to purchase Anadarko Petroleum Corp. (APC). The statement filed July 18 read: "The company's current directors have made a number of mistakes in how and at what cost they pursued the acquisition of Anadarko Petroleum Corporation." He is looking to replace the board members and make some changes to the company's bylaws. The move to formally file the solicitation statement comes after discussions between Icahn and Occidental CEO Vicki Hollub about the matter.

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7/19/2019

Hedge Fund Elliott Trims Stake in U.K.'s Whitbread

Reuters (07/19/19) Hussain, Noor Zainab; Nadkar, Tanishaa

A regulatory filing on July 19 shows that Elliott Capital Advisors has reduced its stake in Whitbread (WTBDY) to less than 5% from 5.3%. Elliott increasingly had become frustrated with Whitbread's strategy of owning Premier Inn hotels outright and pressured the company to offload chunks of its property portfolio. The investor reportedly believes that Whitbread's strategy is depressing the company's share price and leaving it open to a cut-price hostile takeover. Following pressure from Elliott and other hedge funds, Whitbread agreed last August to sell its nearly 4,000 Costa coffee shops to Coca-Cola Co. (KO) for $5.1 billion. Elliott had said the coffee chain was held back by being grouped with the Premier Inn hotel chain.

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7/19/2019

This Year Becomes Year of Improving the Share Price, Reveals Activist Report

IR Magazine (07/19/19) Holt, Andrew

Lazard's Review of Shareholder Activism for the first half of 2019 shows 107 new global shareholder campaigns engaging 99 companies, down 25% from the record in the first half of 2018 but in line with the elevated multi-year trend. Rich Thomas, managing director of European shareholder advisory at Lazard, said, "In 2019 we have seen a pullback in new campaigns but that should not be confused with a reduction in the level of activism. Because 2018 was the year of new ideas with a record number of new campaigns, 2019 has become the year of improving share price performance and generating activist returns. Management and boards can feel that pressure more than ever before." The report reveals that the top 10 activists increased their cumulative capital deployed in public activist positions, new and existing, from $75.5 billion at the end of the first quarter to $82.2 billion at the end of the first half. About 46% of all campaigns in the first half involved the M&A thesis. Thomas said, "The consequence of this increased focus on M&A and strategy is more pressure on management teams and boards to clearly and convincingly communicate their vision for the strategic future of the business." Also in the first half, activists won 81 board seats, 91% of which came from settlements. "Since 2013, approximately 800 board seats have gone to activist nominees," Thomas added. "These new directors are stimulating a changed dynamic in the boardroom, creating an environment that is more challenging and less safe than ever before. With CEO turnover at activist-[engaged] businesses being almost double that of the average company, management teams are feeling pressure to perform. This pressure is coming from an investor base that is much less patient than it was three years ago."

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7/19/2019

Icahn Names Nominees for Oxy Board, Including Former Shell Oil President

Houston Business Journal (07/19/19) Pulsinelli, Olivia

Carl Icahn wants to remove Spencer Abraham, Eugene Batchelder, Margaret Foran, and Avedick Poladian from the board of Occidental Petroleum (OXY), according to a July 18 filing with the Securities and Exchange Commission. To replace them, Icahn has nominated John Hofmeister, Alan LeFevre, Nicholas Graziano, and Andrew Langham. Hofmeister, former president of Shell Oil, heads the not-for-profit membership association Citizens for Affordable Energy, while LeFevre is the former CFO of Jarden, which is owned by Newell Brands (NWL), a company in which Icahn has a non-controlling interest. Graziano has served as portfolio manager of Icahn Capital since February 2018, and Langham has been general counsel of Icahn Enterprises since 2014 and has served on the boards of several companies in which Icahn has a non-controlling interest, including Cheniere Energy (LNG), Freeport-McMoRan (FCX), and Newell Brands. Icahn launched the proxy battle in response to Occidental's pending acquisition of Anadarko Petroleum (APC). Icahn also wants to create a new strategic review committee and amend the company's charter and bylaws. The amendment would reduce the percentage of stockholders required to call a special meeting from 25% to 15%, and the director nominees have agreed to support that resolution if they are elected.

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7/18/2019

Hostile Takeover of PG&E? Billion-Dollar Hedge Funds Duel Over Bankrupt Utility

Sacramento Bee (07/18/19) Kasler, Dale

Two groups of hedge funds are fighting for control of bankrupt California utility PG&E Corp. (PGE), which is facing thousands of lawsuits from wildfire victims. In a July 17 court filing, PG&E's major bondholders said that, as part of a larger reorganization of PG&E, they are seeking to buy 85% of the utility’s stock for $19 billion. PG&E responded in a July 18 court filing that accused the bondholders of trying to seize control of the company "at a significant discount." PG&E is expected to submit its own reorganization proposal in August, which would need the approval of the company's creditors, the bankruptcy judge, and the California Public Utilities Commission. In a commitment letter, the bondholders, who are led by hedge funds including Apollo Global Management, Pimco, and Elliott Management, said they would use the money to settle existing wildfire claims and finance PG&E's required contribution to a new state insurance fund for future wildfire costs. The bondholders' takeover attempt reflects the belief on Wall Street that a well-run PG&E could be extremely profitable. Their plan will likely meet resistance from a group of hedge funds, consisting of Abrams Capital, Knighthead Capital, and Redwood Capital, that own a combined 10% of PG&E's stock. While the bondholders want to pay the old wildfire claims by injecting new capital into the company, PG&E management wants to take on new debt, a move that would benefit them but likely weaken the company. The first test of the bondholders plan comes July 24, when they'll ask Bankruptcy Judge Dennis Montali for permission to circulate their takeover offer among creditors. Typically, PG&E would have the right to submit the initial reorganization plan.

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7/21/2019

Proxy Advisers Sign Up to Tougher Scrutiny

Financial Times (07/21/19) Mooney, Attracta

Five major proxy advisers, including Institutional Shareholder Services and Glass Lewis, have agreed to a series of updated principles and supervision from an independent committee, which has been set up to oversee businesses involved in shareholder voting. These recommendations came from a review led by the Best Practice Principles (BPP) Group for Shareholder Voting Research & Analysis, which was founded in 2013 to glean a better understanding of proxy advisers. The updated principles, which will operate on an "apply and explain" basis, require proxy advisers to disclose the extent to which listed companies have been asked for input on recommendations. The new committee, which will consist of an independent chair and 11 members, will monitor whether companies are applying the updated principles and look at the public reporting of signatories, in addition to managing an open forum. The plans emerge in a period of increased scrutiny for proxy advisers, whose critics have complained that their decision-making lacks transparency and displays conflicts of interest. In June, the second installment of the European Shareholders Rights directive went into force, requiring proxy advisers to disclose information on processes, codes of conduct, and any potential or actual conflicts of interest. Additionally, U.S. regulators, especially the Securities and Exchange Commission (SEC), are circling the sector, prompted in part by criticism from companies. In a joint letter that Nasdaq released in February, several U.S. companies said that "the SEC must take strong action to regulate proxy advisory firms" to uphold American capitalism.

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7/21/2019

CEO Pay Ratio: Leading Indicators of Broader Human Resource Matters?

Harvard Law School Forum on Corporate Governance and Financial Regulation (07/21/19) Kesner, Mike; Tays, Tara; Sim, Ed

Researchers examined the 2019 CEO pay ratio disclosures of 331 S&P 500 companies and saw no company disclose changes to its CEO pay program based on the CEO pay ratio, which, along with other data, suggests that the CEO pay ratio had no material impact on how companies establish CEO compensation. Analysis shows that the change in pay ratio was impacted by an increase or decrease in the compensation of the median employee and the CEO, both in absolute and relative terms. Some 43% of companies used the same median employee from last year, while 9% replaced the median employee with a comparable employee and 48% determined a new median employee. Meanwhile, CEO pay ratio decreased at 46% of companies, of which 12% occurred when both median employee and CEO pay increased, 23% occurred when median pay increased and CEO pay decreased, and 12% occurred when both median and CEO pay decreased. The researchers note that despite its lukewarm impact, CEO pay ratio disclosure may be merely an "opening salvo" in rising demands for additional employee and compensation data. Boards should consider shifting their attention to gender, ethnicity, or racial pay gaps that cannot be properly supported by differences in experience, roles, and responsibilities, individual performance, or other pay-related factors. The researchers point to action on this issue from state legislatures, U.S. companies, presidential candidates, and other countries, as well as a recent report by the Securities and Exchange Commission's Investor Advisory Committee, which called for more corporate disclosure including workforce composition, tenure, training, and other human capital information.

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7/18/2019

U.S. Casinos Unlock the Value in Their Real Estate

Financial Times (07/18/19) Indap, Sujeet

U.S. casino operators increasingly are unlocking the value in their real estate, which is spurring mergers and acquisitions (M&A) across the sector. Specifically, they are splitting off the land on which their giant entertainment complexes sit and taking advantage of investors' hunt for income amid ultra-low interest rates. CreditSights analyst James Goldstein says, "Given the lack of domestic greenfield opportunities, the availability of property finance has facilitated recent sector M&A, a necessity for growth." However, it remains uncertain whether this strategy has made gaming companies themselves an unduly risky proposition for investors, and how they and their associated property companies will perform in an economic downturn. This financial engineering has been pushed to the forefront at Caesars Entertainment (CZR), where commercial mortgage-backed securities have allowed for greater leverage. In June, Caesars was acquired by Eldorado Resorts (ERI) for $11 billion, in part at the urging of investor Carl Icahn, who had amassed a 15% stake. Vici Properties (VICI) agreed that it would simultaneously buy the underlying land and buildings of three additional Caesars casinos for $3.2 billion, providing Eldorado with extra cash to fund the deal. "The Caesars/Eldorado deal represents the continuation of consolidation in the sector and was only made possible by the REIT," said one longtime gaming investor. However, the gaming REIT model is untested in a financial downturn, with Goldstein noting that "it does introduce some risks. Leases reduce the ability for operators to individually address underperforming locations. The absence of owned real estate assets gives operators fewer options in the event of unanticipated financial challenges."

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7/18/2019

Tech Insiders Offer Top Advice on How to Get More Women on Corporate Boards

Fortune (07/18/19) Kowitt, Beth

At Fortune's Brainstorm Tech on July 17, a panel of board directors talked about how to improve board diversity and why it matters. Jeff Richards, managing partner of venture capital firm GGV Capital, says that diverse boards drive diverse managers and companies, but getting portfolio companies to consider fresh talent for board seats can be frustrating. Richards notes that companies will often reject even the most qualified candidates if they have not been on boards before, which leads to missed opportunities for both the company's diversity and its performance. David Trujillo of TPG Capital says his company used to consult big executive search firms to find directors for its portfolio companies, but found that it received the same list of people for every board. In August 2017, TPG laid out the diversity statistics of all 250 of its portfolio companies and began tying compensation to whether partners improved board diversity, spurring TPG portfolio company boards to add 35 women within a year. TPG also compiled a database of 700 potential director candidates, most of whom had never served on a board before, to identify next-generation talent. Several female directors on the panel say they keep a list of strong female board candidates to recommend when they're offered a board position they can't accept. In addition, Hilarie Koplow-McAdams, a venture partner at NEA, says she helps those candidates write their "board narrative" to explain why they would be a good director.

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7/18/2019

With Drexel Burnham-Style Bid on the Table, Red Robin Board Could Use a Friend

Yahoo! Finance (07/18/19) Jannarone, John

Brian Kahn's Vintage Capital has built an 11.6% stake in Red Robin Gourmet Burgers (RRGB) and has made a "non-binding proposal" to acquire the struggling burger chain. Vintage Capital previously had said it was willing to make a $40 a share offer, but until now, there had been some doubt about whether Kahn actually would make a bid or if he was trying to attract another buyer. In terms of financing, Kahn has secured a "highly confident" letter, which is unusual, but observers say it would be a mistake for the company to dismiss his proposals. Red Robin said its board "will carefully review and consider the proposal to determine the course of action it believes is in the best interests of the company's shareholders."

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7/17/2019

Did Elliott Management and the Oracle-Microsoft Deal Impact SAP's Q2 Results?

Forbes (07/17/19)

SAP (SAP), which is expected to report its second-quarter results on July 18, beat consensus expectations on revenue and earnings in the first quarter. Observers note that Elliott Management having taken a stake in SAP likely will have a material impact on the company's performance in the near and long term. SAP hopes to attract customers moving away from Oracle and plans to expand its operating margin by 5% in the next three years. According to Trefis estimates, SAP's shares have a fair value of $121, or 10% below the current market price.

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7/16/2019

Why Is India Trying to Kill Off the Industry of Domestic Hedge Funds?

Bloomberg (07/16/19) Mukherjee, Andy

India's heavy taxation on its domestic hedge fund industry is counterproductive, according to this opinion piece. The industry has grown slowly in the past seven years, reaching $6 billion in investment commitments compared to overseas equity investment in India that is upward of $400 billion. This sluggish development can be attributed to the country's 42.7% tax on annual earnings over 50 million rupees ($730,000), up from 35.9% previously, as well as a 21% tax on cash equities and a law requiring alternative funds to withhold 42.7% on derivatives trading before passing returns to investors. In short, India taxes the bread and butter of the long-short industry, despite the Securities and Exchange Board of India's attempts to set up a domestic industry in alternative assets. Stamping out short-sellers will tilt a skewed playing field even more toward long-only investors, who profit only when share prices rise. Short-sellers have more incentive to regulate corporate governance, framing it as a financial solution to the cronyism that thrives on finance. Moreover, if hedge funds flounder under the tax burden, much of India's private wealth will remain trapped in gold rather than generating the risk capital it needs to elevate its gross domestic product, according to the commentary.

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