Activist Database

Activist Deadline Calendar & Standstill Database

Featuring standstill agreement and nomination deadline windows, provisions and timelines

Media Center

Featuring all breaking news and in depth articles and editorial press coverage pertaining to shareholder activism and corporate governance.
Premier Foods Drops Plans to Sell Dessert Brand Ambrosia
After Review, Brookdale Will Not Split Company in Two
Carl Icahn Builds 10% Stake in Caesars
Exclusive: Portugal Government Sees Elliott's Plan for EDP Brazil as 'Unfortunate'
PG&E Governance Brownout Calls for a Jump Start
Nestle Cuts the Meat in Bid to Build Healthier Food Giant
PPG to Shutter Automotive Coatings Facility in Michigan
Carl Icahn to Push Casino Operator Caesars to Consider Selling Itself
Prominent Investors Stock Up on eBay, Then Hedge Funds Flex Muscle
Italian State Bank Weighs Doubling Stake in Telecom Italia
Ebay Restructures Regional Operations, Lays Off a Percentage of Its Workforce
Billionaire Bolloré to Step Down From Vivendi Board in April
Stock Spirits Executives Survive Boardroom Coup by Western Gate
Brussels Rejects Plea for Dual-Listed London Shares Trading
Elliott Proposes 'Superior' Plan for Portuguese Utility EDP
Yelp Reads Its Own Reviews
Bill Ackman Is Making a Comeback With His Hedge Fund up More Than 24% So Far This Year
PG&E Shareholder Has Chosen Its Own Board Nominees
Here Are the Biggest Holdings of Bill Ackman, Who Is Doubling the Return of the S&P 500 This Year
AEP to Buy Sempra Renewables for $1B, More Than Doubling Wind Assets
Companies Pushed to Reveal Their Median Gender Pay Gap
Akzo Confident of Meeting Takeover Defense Pledge
Lyft Founders to Tighten Grip With Supervoting Shares in IPO
Interserve Rescue Plan: Shareholder Rebellion Grows as Dissenting Hedge Fund Recruits Another Supporter
Video: Pernod Open to Dialogue With Investors Including Elliott, CEO Says
Pernod Is No Takeover Target, Says CEO After 'Constructive' Elliott Talks
Thyssenkrupp Bows to Investor by Simplifying Organization
Just Eat Takeaway Merger Talk Sounds Like Too Much of a Mouthful
Apogee Enterprises and Engaged Capital Enter Confidentiality Agreement
Donald Trump Ally Tom Barrack Examines Shake-up of Real Estate Firm
Sachem Head Pushes Zayo to Explore Sale - Sources
Starboard Proposes Dollar Tree Change Its Pricing
Calls for New Barclays Boss to Shake Up Stale Board
Elliott Questions Pernod’s New Goals
Shareholder Asks Hard Questions of Rock Company CRH
Nielsen Could Be the Next Big Leveraged Buyout, Sources Say
Arconic to Split Into Two After Rebuffing Apollo Offer
Pernod Hits Back at Elliott as Stock Hits Record High
Cevian Eyeing €1Bn CRH Stake
Gaylon Lawrence Jr. Requests Two Seats on CapStar's Board
Elliott Management Emerges as Biggest Shareholder Activist in 2018
Digital First to Attempt an Overhaul of Gannett Board
Premier Foods Says CEO Darby Will Get at Least 1 Million Sterling Exit Deal
Diversity in the 'Man Cave': Boardrooms Gain Women as Minorities Lag
Small Companies Face Added Pressure to Put Women on Boards
The Rise of Women in Corporate Boardrooms
The Road Ahead for Shareholder Activism
Want a Better Board? Look to Private Equity
Institutional Investors Looking More Closely Into Companies, Boards – Morrow Sodali
Pernod Gets the Gentle Treatment From New York Hedge Fund
Charting the Rise of Europe's Investors
A Wary Welcome for Investors' New Tactics
A Rarity On Wall Street: A Female- and Minority-Led Activist Hedge Fund
Funds Turn Attention to Banks as New Merger Wave Sets Up
CEOs Are Opening Their Boardrooms to Hedge Fund 'White Squires' to Keep Other Investors Out
Foreign Funds Set Their Sights on Japan's Smaller Companies
Opinion: Will the Departure of Arconic’s CEO Derail Its Turnaround Plan?
The Long View: The Role of Shareholder Proposals in Shaping U.S. Corporate Governance (2000-2018)

Voting Database

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.

Join us at the 2019 Conference

13D Monitor | In The Media

2/15/2019

Premier Foods Drops Plans to Sell Dessert Brand Ambrosia

Reuters (02/15/19) Hussain, Noor Zainab

Premier Foods Plc (PFODF) said it has decided not to sell its Ambrosia rice pudding and custards brand to reduce debt of more than 500 million pounds ($645 million), citing a difficult business climate that could have hurt the deal value. Ambrosia was put up for sale in November, when company leader Gavin Darby stepped down under pressure from an investor; Darby had failed to halt a share price decline since a proposed takeover by U.S. spice company McCormick & Co. Inc. (MKC) fell apart two years ago. "The Board has concluded that in the present business climate the process will not result in a satisfactory financial outcome. As a result, these discussions have now concluded," Premier Foods said in a statement. Premier Foods has been reducing costs as part of a two-year plan launched in 2017 by laying off people and streamlining its warehousing and distribution network. Its plan to sell only Ambrosia was at odds with Oasis Management's demand that it divest its Batchelors soup brands.

Read the article

2/15/2019

After Review, Brookdale Will Not Split Company in Two

Nashville Business Journal (02/15/19) Stinnett, Joel

Brookdale Senior Living Inc. (BKD) on Feb. 14 said it will not spin off its company owned real estate into a separate investment trust, rejecting repeated calls from investors to do so. Brookdale CEO Cindy Baier made the announcement during the company's fourth quarter earnings call, saying the management team came to the decision after a "comprehensive review." She said tax, valuation, capital, and existing lease concerns were all factors in Brookdale's decision not to spin out a separate REIT. She said Brookdale was assisted in the review by an outside financial adviser who was suggested by an investor that has called for the company to spin off its real estate. "Ultimately ... we simply did not see a path to unlocking value through implementation of this type of transaction at this time," Baier said. "The best way to create shareholder value is through executing our operational turnaround strategy. ... The reality is that we are a senior living health care operator that intentionally owns real estate." Land & Buildings Investment Management LLC Chief Investment Officer Jonathan Litt has been the most vocal proponent publicly urging Brookdale to sell off or spin out its real estate holdings. Litt's firm has a 3.2% stake in Brookdale. Litt has sent numerous letters addressed to shareholders with ideas to boost shareholder value and calls for structural change at the company. Bloomberg in December said that Litt approached Brookdale's management team with the notion of splitting the company into a separate REIT and senior-housing operator. Litt said moving the company's premiere properties into a separate REIT would add value to Brookdale's share price but no agreement was reached on whether to seek a split, according to Bloomberg. It's not clear whether Litt was the investor who recommended the outside financial adviser that aided with the review.

Read the article

2/15/2019

Carl Icahn Builds 10% Stake in Caesars

Financial Times (02/15/19) Fortado, Lindsay; Indap, Sujeet

Carl Icahn has amassed a 10% stake in Caesars Entertainment (CZR) and is pushing the casino chain to sell itself. A source says Icahn contacted Caesars on Feb. 14 to say he had built a stake that exceeds 10% when derivatives transactions are included. He also told the company he might seek a board seat but has not yet decided; he must make that decision by early March. The source also noted that the board is open to a sale or merger but is waiting for the right opportunity.

Read the article

2/15/2019

Exclusive: Portugal Government Sees Elliott's Plan for EDP Brazil as 'Unfortunate'

Reuters (02/15/19) Goncalves, Sergio

On Feb. 15, Portuguese Environment and Energy Transition Minister João Matos Fernandes called Elliott's plan for EDP-Energias de Portugal (EDPFY) to sell its Brazilian operations "unfortunate," indicating that the company would be leaving a fast-growing market. EDP's board rejected a 9 billion euro ($10.13 billion) bid from Chinese state-owned CTG, its largest shareholder with a 23% stake, calling the 3.26 euros per share offer too low. In what it calls a "superior" alternative to CTG's bid, Elliott—which has a 2.9% stake in EDP—proposed raising 7.6 billion euros from a sale of the utility's Brazilian operation, Iberian thermal holdings, and minority stakes in Spanish and Portuguese networks. According to Fernandes, "EDP is free to make the decisions it wants but selling the Brazil operation does not seem to be important for what EDP represents for the national economy."

Read the article

2/14/2019

PG&E Governance Brownout Calls for a Jump Start

Breakingviews (02/14/19) Silva Laughlin, Lauren

California utility PG&E (PCG) wants to replace half of its board members with independent candidates. However, shareholder BlueMountain Capital Management is preparing to nominate a full slate of new directors to replace the current board at the troubled company. The move by BlueMountain, which owns little more than 2% of PG&E, is likely a negotiating ploy because companies rarely lose their entire board in a single move, writes Breakingviews columnist Lauren Silva Laughlin. Several board members were around in 2010 when a pipeline explosion resulted in a felony conviction for PG&E. Wildfires in the past two years have led to short-term liquidity problems that have prompted PG&E to file for bankruptcy, which suggests significant lapses in financial and risk management. While the bankruptcy complicates matters, BlueMountain's other stakes in PG&E suggest that its interests might not be aligned with those of other shareholders. A compromise, like what happened last year at Campbell Soup (CPB) when Third Point called for a new slate of directors, is the most likely outcome, according to Laughlin.

Read the article

2/14/2019

Nestle Cuts the Meat in Bid to Build Healthier Food Giant

Bloomberg (02/14/19) Gretler, Corinne

Nestle SA's (NSRGY) troubled Herta lunch-meat business will be sold as CEO Mark Schneider attempts to boost sales growth through acquisitions and divestments. The world's largest food company saw its shares rise as much as 3.7% to a record as it forecast improved sales. The Swiss company also said it would cede control of its dermatology unit by the middle of the year. Under pressure from investor Dan Loeb, Nestle forecast 700 million francs of restructuring costs this year. Further, the company is accelerating its share buyback to complete the 20 billion-franc program six months early. Schneider indicated that the company is not excluding further mergers or acquisitions. "Acquisitions could easily be financed," he said. "We have strong cash generation, and one of the strongest balance sheets in the industry." Meanwhile, after criticism from Loeb that the company's board lacks consumer-goods expertise, it proposed Dick Boer, former CEO of Dutch grocer Ahold (ADRN), and Dinesh Paliwal, CEO of car-stereo maker Harman, as new directors.

Read the article

2/14/2019

PPG to Shutter Automotive Coatings Facility in Michigan

Pittsburgh Post-Gazette (02/14/19) Gannon, Joyce

PPG (PPG) plans to shutter in June an automotive coatings services plant in Livonia, Mich. Layoffs could start prior to the closure, according to a notice the company filed with the state of Michigan. The company said in its fourth-quarter earnings report released in January that sales of automotive original coatings declined by 5% because of lower demand in its China and Europe markets and an overall slowdown in global automobile production. PPG said in a statement that the closure is "part of ongoing efforts to optimize operations and better service customers." The company is considering whether to split its industrial coatings business, which includes original automotive coatings, from its architectural segment, which includes house paints. Separating the operations was among changes called for by Nelson Peltz whose Trian Fund Management has a 3% stake in the company. PPG anticipates finalizing its study of whether to separate the units by the end of this year's second quarter.

Read the article

2/14/2019

Carl Icahn to Push Casino Operator Caesars to Consider Selling Itself

Wall Street Journal (02/14/19) Lombardo, Cara

Sources say Carl Icahn plans to pressure Caesars Entertainment Corp. (CZR), of which he owns 10%, to consider selling itself. The sources note that Caesars has received at least two approaches in recent months, from Eldorado Resorts Inc. (ERI) and Golden Nugget LLC (GDEN). Talks with Eldorado went nowhere, and Caesars rejected Golden Nugget's proposed combination, according to the sources. They say Icahn believes Caesars would be better managed in the hands of a rival and wants the company to allow shareholders, rather than the board, to decide if it should be sold. They added that Icahn's 10% stake is through swaps that do not give him control of the shares but allow him to benefit from any price increase. Further, the sources say Icahn got involved after a handful of shareholders asked him to help get the company sold. He reportedly has not ruled out launching a proxy fight, but the deadline for doing so is March 1.

Read the article

2/14/2019

Prominent Investors Stock Up on eBay, Then Hedge Funds Flex Muscle

Reuters (02/14/19) Herbst-Bayliss, Svea

Several prominent hedge funds either established new or added to existing positions in EBay Inc. (EBAY) in late 2018, because they are convinced that change is on the horizon despite the company's stock price having slumped for most of the year. New investments were made by Baupost Group and BlueMountain Capital. Hudson Bay Capital Management and Adage Capital Partners expanded their bets during the fourth quarter, and UBS AG (UBS), Citigroup Inc. (C), JPMorgan Chase (JPM), and Morgan Stanley (MS) purchased millions of new shares as well. Observers note that eBay's nearly 30% gain in share price during the first seven weeks of trading this year likely was fueled by behind-the-scenes moves by Elliott Management and Starboard Value, which built stakes in the company recently. A regulatory filing from Elliott showed that it made a new bet on eBay in the fourth quarter, listing call options on 8.5 million shares. Although eBay was not listed on Starboard's filing, sources say the hedge fund also built a stake and contacted management. Meanwhile, on Feb. 14, eBay announced a restructuring plan that will unite geographic regions under a global segment and said senior executive Scott Cutler will leave the company.

Read the article

2/14/2019

Italian State Bank Weighs Doubling Stake in Telecom Italia

Bloomberg (02/14/19) Lepido, Daniele

Italian state bank Cassa Depositi e Prestiti is considering doubling its stake in Telecom Italia (TI). The bank's board has authorized a purchase of as much as 10% of Telecom Italia's stock if a management plan—including a spinoff of the landline business—delivers value. The bank has backed Elliott Management in its battle with Vivendi for control of Telecom Italia, supporting its successful coup of the former phone monopoly's board last May. Vivendi, which holds a 24% stake in Telecom Italia, will seek backing for a new board slate at the company's annual meeting on March 29. Meanwhile, Elliott, which holds 9.6% of the company, raised its stake last month and is considering boosting it further. Cassa Depositi e Prestiti currently own a 5% stake. "If CDP and Elliott raise their stake to 10% and 15% respectively, Vivendi could have more difficulties in removing five board members during [the] next annual meeting," Pietro Solidoro, an analyst at Fidentiis, wrote in a note.

Read the article

2/14/2019

Ebay Restructures Regional Operations, Lays Off a Percentage of Its Workforce

TechCrunch (02/14/19) Lunden, Ingrid

Online marketplace eBay (EBAY) has been reviewing its operations in an effort to bring the company back to growth amid strong competition from other online marketplaces. Elliott and Starboard have been urging eBay to reorganize. Elliott published an open letter earlier this year calling for eBay to revamp its main Marketplace, update management, and review its other businesses such as StubHub and classifieds. The company announced Feb. 14 that it would be reorganizing its business units and consolidate its geographical regions into a single team, to be led by Jay Lee, a longtime veteran of the company. In addition, the company will be laying off a percentage of its global workforce. Further, Scott Cutler, who had been senior vice president of the Americas, will be leaving the company. Lee will oversee that role until a new head of the Americas is found.

Read the article

2/14/2019

Billionaire Bolloré to Step Down From Vivendi Board in April

Financial Times (02/14/19) Agnew, Harriet

Vincent Bolloré, who has come under official scrutiny for his business practices in Africa, will leave the Vivendi board in April, the company announced Feb. 14. Vivendi said it plans to ask shareholders at its annual general meeting in April to appoint Cyrille Bolloré to replace his father on the board. Cyrille heads the transport and logistics division at the Bolloré Group, the family holding company. "The decision [to step down] was Vincent's," said Vivendi CEO Arnaud de Puyfontaine. "The most important thing is that we have the long-term commitment of our number one shareholder." Bolloré Group is Vivendi's biggest shareholder and Vincent Bolloré remains chairman of the holding company. Vivendi continues to battle Elliott over Telecom Italia. Vivendi said Feb. 14 that last year it wrote down the value of its investment in Telecom Italia by 1.1 billion euros. It did so to take into account "the uncertainty affecting Telecom Italia's governance" and "the changes to Telecom Italia's competitive and regulatory environment."

Read the article

2/14/2019

Stock Spirits Executives Survive Boardroom Coup by Western Gate

City A.M. (02/14/19) Warrington, James

Chairman David Maloney and senior independent director John Nicolson have survived a shareholder vote at Stock Spirits' annual general meeting after Western Gate, owned by Portuguese retail billionaire Luis Amaral, called into question the company's leadership. Western Gate, which has a 10% stake in Stock Spirits, attacked the drinks manufacturer's board for failing to offer a clear growth strategy. The investment fund also criticized leadership for failing to carry out enough acquisitions and delivering low cash returns to shareholders. Western Gate in January called on fellow shareholders to vote against the reappointment of the executives in an effort to overhaul a "culture of group-think." However, approximately 80% of shareholders voted to retain Maloney and Nicolson. Still, despite the defeat, Western Gate said the vote showed there is significant discontent among investors and reiterated its calls for a change in leadership. "We consider this large shareholder protest vote at today's AGM against the chairman and senior independent director, for the second year running, as one that the board cannot ignore," said Francisco Santos, executive director of Western Gate. "We call for the board to accept this mandate for change."

Read the article

2/14/2019

Brussels Rejects Plea for Dual-Listed London Shares Trading

Financial Times (02/14/19) Brunsden, Jim; Stafford, Philip

In a no-deal Brexit, European Union (EU) asset managers would not be able to continue trading dual-listed shares in London, says the European Commission (EC). Instead, fund managers would have to trade the dual-listed shares on EU exchanges, where prices are often less competitive. Many are concerned the rules could shift trading and consolidate dual listings in the bloc. Alternatively, it could see companies delist their EU quote and focus on Britain. The EC argues that it is important to keep no-deal Brexit contingency measures to a strict minimum to prevent Britain from gaining access to the bloc's single market through the backdoor.

Read the article

2/14/2019

Elliott Proposes 'Superior' Plan for Portuguese Utility EDP

Reuters (02/14/19)

Elliott said on Thursday it had proposed a “superior” alternative to shareholders in utility Energias de Portugal (EDPFY) than a bid from China Three Gorges, including raising 7.6 billion euros from asset sales. State-owned CTG, which is already EDP’s largest shareholder with a 23% stake, launched a 9 billion euro ($10.13 billion) bid for Portugal’s biggest company in May last year. EDP’s board has rejected the 3.26 euros a share offer as too low. Elliott said it had written to EDP’s board stating that “CTG’s bid in its current form is not in the best interests of EDP stakeholders and would ultimately leave EDP weaker.” Elliott also said it represented a shareholding in EDP of 2.9%, making it one of the utility’s top 10 shareholders. “Over the course of several months we have devoted considerable time and resources to better understanding the challenges and opportunities facing EDP,” Elliott said. “Our extensive research convinced us that EDP is an attractive company with substantial unrealized potential.” CTG’s bid proposal needs regulatory approval in a number of countries, including Brazil, the United States, Portugal, and the European Union.

Read the article

2/13/2019

Yelp Reads Its Own Reviews

Wall Street Journal (02/13/19) Forman, Laura

Observers say Yelp (YELP) appears to have listened to ideas from SQN Partners to bolster the company, which had lost nearly 30% of its market value following its third-quarter report. The investor suggested replacing three of its eight board members to include more impartial and experienced names, and on Feb. 13, Yelp announced that it has appointed three new board members from companies like Starbucks (SBUX), HomeAway, and Twilio (TWLO). SQN also called on Yelp to repurchase $500 million of stock, and the company said it has added an additional $250 million to its share-repurchase program for a total of $500 million and expects to buy back $250 million in the first half of 2019. Yelp also said that under its strengthened board, it plans to increase revenue at double-digit compound annual growth rates and reach adjusted EBITDA margins of 30% to 35% long term, up from 19% last year. The company's shares were up 6% after hours following a fourth-quarter earnings report that exceeded expectations.

Read the article

2/13/2019

Bill Ackman Is Making a Comeback With His Hedge Fund up More Than 24% So Far This Year

CNBC (02/13/19) Franck, Thomas

Bill Ackman's Pershing Square is up 24.7% in 2019 through Feb. 12, according to the hedge fund's website. The fund has made many headlines in the past year for new stakes in Starbucks (SBUX) and Hilton Worldwide Holdings (HLT). Ackman explained in his latest shareholder letter that the recent positive performance has been fueled by investments in ADP (ADP), Lowe's (LOW), Starbucks, and Chipotle (CMG). Pershing Square in the third quarter of 2018 dissolved its stake in Mondelez (MDLZ) and took a stake in Starbucks at an average cost of $51 per share. That means the hedge fund is already up about 37% on the investment. The fund also realized success on its bet on Chipotle, which is up more than 136% over the past 12 months at $593.66 per share. Ackman first purchased Chipotle stock in 2016 at an average price of $405 per share. Ackman helped Chipotle install Brian Niccol as the company's CEO early last year and has backed innovative menu and delivery choices. Pershing also made $100 million in profit from a stake in Nike (NKE) it sold last year. The success comes after a period of negative returns. By early 2018, the hedge fund's assets had been sharply reduced from their peak above $20 billion in 2015. Some of the fund's challenges over the past few years included a $4 billion loss on its stake in Valeant Pharmaceuticals (BHC). Further, Ackman's short of Herbalife (HLF) was costly not only in money lost, but also in reputation due to the spotlight on the fight over the company with Carl Icahn.

Read the article

2/13/2019

PG&E Shareholder Has Chosen Its Own Board Nominees

Barron's (02/13/19) Scaggs, Alexandra

BlueMountain Capital is still lobbying for change at PG&E (PCG) despite the California utility having filed for bankruptcy. The hedge fund plans to put forward a new slate of directors at the company's annual shareholder meeting on May 21. BlueMountain said on Feb. 13 that it has already selected those 13 director candidates and will announce them by Feb. 21. Meanwhile, PG&E plans to put up five directors for re-election at the meeting, according to a company filing. It said a majority of its board would be independent directors by the date of the meeting. BlueMountain said that if its directors are chosen to replace the board, they would replace the company's current management, scrutinize its safety practices, and push to exit bankruptcy quickly.

Read the article

2/13/2019

Here Are the Biggest Holdings of Bill Ackman, Who Is Doubling the Return of the S&P 500 This Year

CNBC (02/13/19) Franck, Thomas

Pershing Square Holdings' investments have been lucrative this year. Chipotle (CMG) boosted Pershing Square's gross returns by 6.2% in 2018, and it is up more than 38% in 2019. Pershing's Bill Ackman helped bring aboard Brian Niccol as the company's CEO in March. Niccol has been advocating digital and marketing investments to return the company back to consistent growth. "Brian and his team have made significant progress turning around Chipotle and reaccelerating growth," Ackman wrote in the hedge fund's shareholder presentation. "Reigniting same-store sales growth is the key priority for 2019." Chipotle's same-store sales advanced 6.1% in the fourth quarter, beating consensus expectations of 4.49% growth; profits also topped analyst expectations. United Technologies (UTX) has been another strong performer for Pershing; the stock is up more than 17% since Jan. 1. United Technologies is a "high-quality industrial conglomerate with market-leading businesses in aerospace, elevators, and heating, ventilation, and air conditioning," Ackman's presentation noted. The "upcoming business separation should be a catalyst for significant share price appreciation." He added that United Technologies seems well insulted from the current trade dispute between the United States and China and has seen "limited impact" from tariffs. One investment that has yet to post significant gains for Pershing is Hilton Worldwide Holdings (HLT). The fund said in October that it had purchased a 3.7% stake in the global hotel operator, shortly before shares dropped to a more than one-year low on concerns over a slowdown in the hospitality business. The stock has largely matched the performance of the S&P 500 this year, but the fund remains optimistic. "Hilton is a high-quality, asset-light, high-margin business with significant growth potential led by a superb management team," the fund told clients Feb. 13. Its "collection of scaled brands and [its] loyalty program create strong network effects for consumers and cost and revenue advantages for hotel owners."

Read the article

2/13/2019

AEP to Buy Sempra Renewables for $1B, More Than Doubling Wind Assets

Utility Dive (02/13/19) Gheorghiu, Iulia

American Electric Power's (AEP) renewable energy subsidiary plans to purchase Sempra Renewables (SRE) for about $1.056 billion, AEP said Feb. 12. The deal includes 724 MW of operating wind generation and battery assets. The acquisition will significantly boost AEP's wind portfolio. Currently, the utility has 351 MW of contracted renewable generation. "We targeted $2.2 billion of capital investment in competitive, contracted renewables by 2023. Adding these high-quality renewable assets to our portfolio will achieve a significant portion of that goal this year," stated Nicholas Akins, president, CEO, and chairman of AEP, in a press release. The deal is expected to close in the second half of the year, pending federal regulatory approval. Elliott Management and Bluescape Resources, both investors in Sempra, have called for the company to spin off its U.S. liquefied natural gas businesses and its businesses in Latin America. The company created a new LNG and business development committee in September as part of an agreement with the investors.

Read the article

2/13/2019

Companies Pushed to Reveal Their Median Gender Pay Gap

Washington Post (02/13/19) McGregor, Jena

In new shareholder proposals, Arjuna Capital is urging 11 financial and technology firms, including Facebook (FB), Bank of America, Alphabet (GOOGL), and Amazon (AMZN), to disclose an unfiltered and most likely unflattering global gender pay gap statistic. Citigroup (C) published its figure, stating that its unadjusted global median pay for women is 29% less than it is for men, after it received a proposal from Arjuna. In the past, these companies have been pressured by Arjuna to reveal their "pay equity" gap, which compares what women make with men who work in the same jobs. Sharing that figure is easier for companies because most report at 99% or even 100% of men's earnings. However, the median gender pay gap shines a harsher spotlight on a what's known as the "position gap," revealing how many women, compared with men, are in a company's top-ranking, highest-paying jobs.

Read the article

2/13/2019

Akzo Confident of Meeting Takeover Defense Pledge

Financial Times (02/13/19) Pooler, Michael

Akzo Nobel (AKZOD) said it is making progress toward its objective of generating a 15% return on sales by 2020. The Dutch paint and coatings company pledged to improve earnings as part of its defense against an unwanted €27 billion takeover offer from U.S. rival PPG Industries (PPG) in 2017. Following criticism from Elliott and other shareholders over its handling of the bid, the company sold off its chemicals division last year for €10 billion. CEO Thierry Vanlancker said, "Our relevant competitors all took a nosedive in their profitability so we really went against the tide. Our internal plans really do add up to the [2020 target]." Among other things, the company confirmed that a share buyback of up to €2.5 billion would be completed by the end of the year, fulfilling a promise to return the vast majority of proceeds from the speciality chemicals disposal.

Read the article

2/12/2019

Lyft Founders to Tighten Grip With Supervoting Shares in IPO

Wall Street Journal (02/12/19) Farrell, Maureen; Lombardo, Cara

The founders of Lyft Inc., President John Zimmer and CEO Logan Green, reportedly are working with underwriters and lawyers on a plan to create a class of shares with extra votes that they will hold. This would give them near-majority voting control of the ride-hailing company when it goes public this year despite together owning a stake of less than 10%. A source also notes that Lyft is expected to appoint an existing board member as nonexecutive chairman in a move that could be aimed at shoring up its governance. Lyft would join Facebook Inc. (FB), Google parent Alphabet Inc. (GOOGL), and Snap Inc. (SNAP) in creating a supervoting structure that gives the founders control. However, unlike other hot Silicon Valley startups, Zimmer and Green had not implemented a supervoting structure while Lyft was a private company and instead have held voting power in proportion to their economic stake. Some existing investors are frustrated by their moves, because they will preclude Lyft from being included in some stock indexes, essentially eliminating large pools of public-market buyers. Observers note that having investor Carl Icahn's former managing director, Jonathan Christodoro, on the board has not made much difference. In 2015, the company took $100 million from Icahn at a valuation of $2.5 billion.

Read the article

2/12/2019

Interserve Rescue Plan: Shareholder Rebellion Grows as Dissenting Hedge Fund Recruits Another Supporter

City A.M. (02/12/19) Daniel, Alex

Coltrane Asset Management last week launched a bid to oust all members of Interserve's board except CEO Debbie White after the company announced the details of a deleveraging plan with its lenders. Coltrane has a 27% stake in Interserve. Dutch hedge fund Farringdon Capital Management, which has a 6.2% stake in the outsourcer is also now backing the rebellion. Bram Cornelisse, chairman of Farringdon, told City A.M. Feb. 12 that the fund is "supporting the efforts of Coltrane to achieve a more equitable outcome for shareholders compared to the deal suggested by management which hands almost the entire company to the debt holders." A source added Farringdon has also written directly to Interserve on the matter. A vote will take place in March. Interserve needs the support of 50% of its shareholders to go ahead with the deal. Interserve's rescue deal prompted anger at Coltrane last week because it proposed all but eliminating existing shareholders' stake in the company, trimming it to just 2.75%, while lenders including RBS, HSBC, and BNP Paribas would be given control. Coltrane subsequently wrote to the company calling for a general meeting and the ouster of directors Glyn Barker, Mark Whiteling, Russell King, Anne Fahy, Nick Salmon, Gareth Edwards, Dougie Sutherland, and Nicholas Pollard. It said Interserve should replace them with two rescue specialists, David Frauman and Stuart Ross. Sutherland also announced he is stepping down from the board, and will leave his role as a director at the end of February, though a source said his decision was "not in any way related" to Coltrane's demand. Debbie White, CEO of Interserve and the architect of the rescue deal, continues to have shareholders' support, according to the firm.

Read the article

2/12/2019

Pernod Is No Takeover Target, Says CEO After 'Constructive' Elliott Talks

Reuters (02/12/19) Geller, Martinne

Distiller Pernod Ricard's CEO Alexandre Ricard on Feb. 12 described discussions with Elliott as "cordial and constructive." He said the discussions centered around corporate governance and margin improvement. He dismissed speculation that the company could become a takeover target. "I hope there will be no surprise if I reiterate very clearly and specifically—Pernod Ricard is here, Pernod Ricard is here to stay and Pernod Ricard is and will remain a consolidator." He declined to comment on the likelihood that Elliott would seek a board seat.

Read the article

2/12/2019

Thyssenkrupp Bows to Investor by Simplifying Organization

Reuters (02/12/19) Steitz, Christoph

Thyssenkrupp's (TKAMY) decision to streamline its corporate structure marks a win for Cevian as the German company works to retain shareholders with its wider restructuring plan. Cevian has an 18% stake in the submarines-to-elevators group. Thyssenkrupp plans to scrap its matrix structure, which has long been criticized by investors for adding costs and slowing down decision-making with its multiple leadership layers based on products and regions. The company said the plan, which includes taking out parts of its organization related to regional headquarters and shared services, would assist with cutting general and administrative costs to below 300 million euros ($339 million) by 2020-21, representing a 20% reduction. Cevian has been a vocal critic of the matrix structure, calling for a more nimble and leaner set-up. "The decision of Thyssenkrupp's management team to remove the matrix structure is a major step to free entrepreneurial forces and increases accountability of management," stated Lars Foerberg, founding partner of Cevian Capital. "Thyssenkrupp has great potential and we support every step that improves the competitiveness of the company." The revamp comes ahead of a wider restructuring that will see the group separate its capital goods arm—elevators, car parts, and plant engineering—from its materials operations, and needs to be implemented before the legal separation, which will be effective as of October.

Read the article

2/11/2019

Just Eat Takeaway Merger Talk Sounds Like Too Much of a Mouthful

Financial Times (02/11/19) Vincent, Matthew

Cat Rock Capital was surprised by Just Eat (JSTTY) appointing Kevin Edwards, former chief marketing officer of the Movember Foundation, to run its Canadian business. The Movember Foundation is an organization that encourages men to grow mustaches for charity, meaning Edwards' expertise in "food delivery" is limited. Cat Rock also criticized the hiring of Peter Plumb, former CEO of Moneysupermarket, as Just Eat's CEO—a position that he exited last month. Now, the investor is questioning whether interim CEO Peter Duffy has any experience in food delivery after serving eight years at easyJet (ESYJY). In an open letter to Just Eat's board on Feb. 11, Cat Rock wrote, "Just Eat clearly needs a world-class management team with online food delivery experience." The firm's founder, Alex Captain, called the company's progress in recruiting a permanent CEO "plodding, and ultimately calamitous" and suggested that the experienced candidates he put forward had been disregarded. He recommended that Just Eat contact "a well-run industry peer" and invite it to "merge" with Just Eat by offering a premium to the current share price, paid in its own equity. Captain argued that this approach would result in a new management team with proven knowhow and working technology. "We would expect that there would be significant strategic interest in a merger from other industry participants," he said. "For example...Takeaway.com." Observers note that Cat Rock, as a 5% shareholder in Takeaway.com, could see an uplift in its 2% stake in Just Eat as the result of such a deal, especially because Takeaway.com has risen in value by 20% in a year while Just Eat's share price has fallen 20% over the same period.

Read the article

2/11/2019

Apogee Enterprises and Engaged Capital Enter Confidentiality Agreement

StreetInsider.com (02/11/19)

Apogee Enterprises (APOG) shareholder Engaged Capital has disclosed that on Feb. 8, 2019, Engaged Capital and certain of its affiliates entered into a confidentiality agreement with the issuer. Pursuant to the agreement, the issuer agreed to make available to Engaged certain confidential information with respect to the issuer and agreed to provide Glenn W. Welling reasonable access to certain advisors of the issuer and reasonable opportunities to meet with the issuer's chairman or CEO.

Read the article

2/11/2019

Donald Trump Ally Tom Barrack Examines Shake-up of Real Estate Firm

Financial Times (02/11/19) Vandevelde, Mark

Tom Barrack, the real estate magnate who helped Donald Trump win the U.S. presidency, has agreed to consider a reorganization of his Colony Capital business following pressure from Blackwells Capital. Colony has lost more than 50% of its value since merging with competitor Northstar in 2017. It says it has reached an agreement with Blackwells to appoint two new directors to its board. The two directors will sit on a special committee "tasked with reviewing ... issues related to the company's assets and business configuration." This is Blackwells' second public campaign.

Read the article

2/11/2019

Sachem Head Pushes Zayo to Explore Sale - Sources

Reuters (02/11/19) O'Donnell, Carl; Franklin, Joshua

Sachem Head Capital Management has written a letter to U.S. communications infrastructure provider Zayo Group Holdings Inc. (ZAYO) calling on it to weigh a sale, according to sources. Sachem Head has a 2% stake in Zayo Group. The letter comes after Zayo turned down acquisition offers from a private equity consortium that includes Blackstone Group LP, Stonepeak Infrastructure Partners LP, KKR & Co., I Squared Capital, Charlesbank Capital Partners, and GTCR, the sources said. The most recent offer that Zayo turned down valued its stock at approximately $30 a share, the sources noted. Shares ended trading on Monday at $25.51 a share, giving the company a market capitalization of about $6 billion. Zayo also has approximately $6 billion in debt. Sachem Head has not threatened a proxy battle, but that option remains on the table, the sources said. Zayo had said last November it would break itself up into two companies, but said last week it no longer believed it was in the company's best interest.

Read the article

2/10/2019

Starboard Proposes Dollar Tree Change Its Pricing

Financial Times (02/10/19) Gray, Alistair

Starboard Value's Jeff Smith says the discount variety chain Dollar Tree (DLTR) should stop pricing every item at only $1. Starboard took a 1.7% stake in Dollar Tree last month. Along with his call for the company to explore a sale of Family Dollar, which it bought in 2015, Smith has made his demand for it to test differently priced items a centerpiece of the activist campaign. Dollar Tree's recent financial performance has underwhelmed. The company has struggled to revive the fortunes of the underperforming Family Dollar. Dollar Tree shares have lost 4% over the past year. Starboard argues that inflation has made Dollar Tree's current pricing strategy increasingly untenable. In a letter to Gary Philbin, chief executive, Smith said the retailer had been forced to cut package sizes, reduce quality, or stop selling some products that customers would otherwise buy. Starboard is pushing for seven directors to be added to the board. Dollar Tree, advised by JPMorgan Chase, says the hedge fund made its demand "without seeking any engagement."

Read the article

2/9/2019

Calls for New Barclays Boss to Shake Up Stale Board

The Telegraph (U.K.) (02/09/19) Burton, Lucy

Barclays' (BCS) incoming chairman Nigel Higgins is ­under immediate pressure to shake-up the bank’s board as major shareholders push for fresh faces at the top. Higgins replaces John McFarlane in May. He has started discussions with the bank’s top investors to discuss the lender's future, and is holding a string of one-on-one meetings in the month ahead as investor Edward Bramson seeks backing for a board seat. One major investor, who asked not to be named, said that while he is on the fence about Bramson he would welcome “fresh eyes” on the board to look at the bank’s strategy. “The moves management is making at the moment are improving returns, but they could do with some vigor on the board,” he said. “There needs to be some fresh eyes to this. More skill set and more focus.” Bramson ramped up efforts to ­secure himself a board seat last week. He is seeking a shareholder vote on the matter at the bank’s annual meeting in May, having been spurned by Barclays’ bosses last year.

Read the article

2/8/2019

Elliott Questions Pernod’s New Goals

Wall Street Journal (02/08/19) Roca, Cristina

Elliott Management Corp. argued Friday that Pernod Ricard's (PDRDY) financial targets could be more ambitious, after the spirits maker set out fresh mid-term guidance yesterday during half-year earnings reporting. The fund, which disclosed a stake in Pernod late last year, has been calling for changes to the company’s operational strategy and governance, saying it lags behind peers such as Diageo (DEO). Elliott said Friday that Pernod’s new plan “is a first small step in starting to address the company’s shortcomings in operational efficiency.” Pernod, the owner of Absolut vodka, raised its full-year operating profit guidance Thursday and said that as part of its mid-term plan, it will target sales growth of 4%-7% between fiscal 2019 and 2021. It will also increase its operating leverage by 50 to 60 basis points annually between fiscal 2019 and 2021 and gradually up its dividend distribution to roughly 50% of profit from recurring operations by fiscal 2020, up from a distribution of 41% for fiscal 2018. In an interview Thursday, Pernod CEO Alexandre Ricard hit back at Elliott, saying the business is going in the right direction. However, Elliott responded Friday that it believes these targets could go further, and that the steps proposed by Pernod lack specificity and clarity. “Necessary enhancements to the company's board and corporate governance have yet to be addressed,” the investor said.

Read the article

2/8/2019

Shareholder Asks Hard Questions of Rock Company CRH

Irish Times (02/08/19) Brennan, Joe

Cevian has spent as much as €600 million building up a stake of under 3% in CRH (CRH), Ireland's largest listed company. The firm is known for effecting change from within by joining the boards of companies in which it invests. CRH is at the top of the class among European rivals in turning earnings before interest, tax, depreciation, and amortization (EBITDA) into cash. It converted 75% to 80% of its profits between 2013 and 2017, compared to less than 50% for peers. However, observers note that CRH's EBITDA margins were an estimated 12.6% last year, compared to between 17% and 25% for its peers. "Investors are beginning to question the company's strategy," said AllianceBernstein analysts led by Phil Roseberg in a recent report. "Organic growth has stalled over the last years." Observers note that Cevian could call on CRH to look at a partial listing of its North American unit in New York to unlock value, and by getting in now, it may have a say in CRH's next move, as its current €1 billion share buyback program nears completion. Cevian plans to engage with management after CRH's annual results at the end of February.

Read the article

2/8/2019

Nielsen Could Be the Next Big Leveraged Buyout, Sources Say

CNBC (02/08/19) Faber, David

Sources say Nielsen (NLSN) could be the next big leveraged buyout, with potential bidders including Hellman & Friedman with Blackstone, or Goldman Sachs Private Equity with Advent International. The market research firm has been quietly pursuing a take-private deal, according to the sources, and a round of bids was due in January. Observers say a take-private of Nielsen could fetch $10 billion. Elliott Management amassed a sizable stake in Nielsen last year and pushed for a sale. In September, Nielsen said it had hired bank and legal advisors to explore strategic alternatives.

Read the article

2/8/2019

Arconic to Split Into Two After Rebuffing Apollo Offer

Reuters (02/08/19) Ajmera, Ankit

On Feb. 8, Arconic (ARNC) said it would split into two companies and cut its quarterly dividend by two-thirds. The move comes weeks after the U.S. aluminum products maker rejected Apollo Global Management's buyout offer. Elliott Management, Arconic's biggest shareholder, has been pressuring the company to sell itself. Apollo's offer could have valued Arconic at about $17 billion, but potential legal liabilities from its smaller building and construction systems unit raised concerns about that valuation. "After a rigorous and comprehensive process...the board sees more shareholder value creation through a restructuring of the company," said Arconic Chairman John Plant, who assumed the role of CEO in a surprise move on Feb. 6. The company did not specify which division it intends to spin off and when.

Read the article

2/7/2019

Pernod Hits Back at Elliott as Stock Hits Record High

Wall Street Journal (02/07/19) Kostov, Nick

Pernod Ricard (PDRDY) chief Alexandre Ricard defended against criticism from Elliott Management Corp., presenting his own plan to boost profit. The French drinks giant has been under pressure since Elliott acquired a 2.5% stake in December, saying Pernod had “significant room for improvement” and calling for better profit margins and governance. Ricard says Pernod is making progress on both fronts. “The business is going in the right direction,” said Ricard, the grandson of the company’s founder, in a recent interview. Ricard’s position was bolstered Thursday when the company raised its profit forecast for the year, helped by strong demand for high-end cognac in China. Its shares rose 2.5% to hit a record high. Pernod said it would target sales growth of 4% to 7% over the next three years as part of a plan that also aims to boost operating profit margin by 0.5 and 0.6 percentage points a year and cut €100 million of costs over two years. “We've been building the foundations of future growth for the past three years,” Ricard said. “Now it's all about consolidating. However, it isn't clear if these moves will satisfy Elliott. The hedge fund, which is one of Pernod's largest investors, has argued that Pernod has lost market share in key drinks and “underperformed its peers on several metrics.” Elliott also wants Pernod to raise its operating margin to a level closer to rival Diageo (DEO).

Read the article

2/7/2019

Cevian Eyeing €1Bn CRH Stake

Independent (Ireland) (02/07/19) Mulligan, John

Cevian Capital has confirmed that it has made an investment in Irish building materials giant CRH (CRH). Cevian did not reveal its precise stake in CRH, but it is less than the 3% threshold that requires a shareholding to be notified publicly to the stock exchange. "The group has many strong positions in attractive markets and we are convinced that CRH's assets could become significantly more valuable," says Christer Gardell, managing partner of Cevian. CRH is valued at €22 billion. Cevian's previous track record suggests that it could raise its stake in CRH to at least 5%, worth €1.1 billion. The investment firm usually takes between a 5% and 20% stake in listed companies it invests in, and typically seeks a seat on the board. Cevian likely built up its shareholding in CRH over several months, and likely engaged with CRH management, including CEO Albert Manifold, prior to making the investment.

Read the article

2/7/2019

Gaylon Lawrence Jr. Requests Two Seats on CapStar's Board

Nashville Business Journal (02/07/19) Garner, Meg

Securities and Exchange Commission filings reveal that Gaylon Lawrence Jr. recently sent a letter to officials at CapStar Financial Holdings Inc. (CSTR) seeking two seats on the Nashville bank's board, one for himself and another for Jason West, who oversees his investments. Lawrence owns 6.5% of CapStar and has been embroiled in an ongoing dispute with the bank, which sued him more than a year ago for mounting an alleged "creeping takeover." In November, Lawrence's application to buy up to 15% of CapStar's outstanding shares was approved by federal regulators despite the bank's protests. His current stake was previously greater than 10% but was diluted after CapStar's acquisition of Athens Federal Community Bank.

Read the article

2/7/2019

Elliott Management Emerges as Biggest Shareholder Activist in 2018

New York Post (02/07/19) Kosman, Josh; English, Carleton

Elliott Management was the most prolific shareholder activist in 2018, according to Lazard Asset Management. Last year, the fund waged 22 campaigns for board representation, making it the biggest player in the activist category. Of those 22 campaigns, 13 have seen their stocks trend higher than the day before Elliott publicly entered the fray, while eight are trading below. That's a success rate of 62%. The biggest winner was British broadcaster Sky at 67%, and the biggest loser is Telecom Italia, down about 30%. The fund's returns gained just over 2% last year at a time when many funds tanked, according to a report by LCH Investments last month.

Read the article

2/7/2019

Digital First to Attempt an Overhaul of Gannett Board

Wall Street Journal (02/07/19) Lombardo, Cara

Digital First Media, the hedge-fund-backed newspaper chain officially known as MNG Enterprises Inc., has launched a proxy fight to shake up Gannett Co.'s (GCI) board of directors. Digital First is one of Gannett's biggest shareholders with a roughly 7.5% stake. It nominated a slate of six candidates Thursday and will solicit shareholder votes for them to replace a majority of the board members at the company's annual meeting this spring. Gannett, the publisher of USA Today and other daily newspapers, earlier this week rejected a $1.4 billion takeover bid from Digital First and questioned the bid's credibility. Digital First's nominees include Heath Freeman, one of the founders of Alden Global Capital LLC, the New York hedge fund that is Digital First's majority owner and is known for slashing costs at the titles it acquires. MNG Chairman Joseph Fuchs and former MNG Chief Executive Steven Rossi are also nominees. Digital First said it would have preferred to avoid a costly and distracting proxy contest, but that it had no choice after Gannett refused to extend the nomination deadline to allow for continued discussions. Digital First also attempted in writing to reserve the right to submit placeholder names for its nominees and potentially swap them out later, which would give it more time to locate and vet nominees, according to sources. But Gannett's bylaws don't allow this, those sources said. Gannett spurned Digital First's initial offer Monday, saying it undervalued the company, questioning how it would be financed, and raising concerns about Digital First's record of laying off staffers at its publications.

Read the article

1/8/2019

Premier Foods Says CEO Darby Will Get at Least 1 Million Sterling Exit Deal

Reuters (01/08/19) Nair, Arathy S.; S. Sangameswaran

Premier Foods (PFODF) said its former CEO, Gavin Darby, will receive at least 1 million pounds in an exit deal after he stepped down following a shareholder revolt. Darby had attracted investor criticism for failing to revive the business after rebuffing a takeover approach from McCormick & Co. Inc. (MKC). The company's shares have lost almost a third of their value since McCormick abandoned its approach in April 2016, and nearly 41% of Premier shareholders in July 2018 supported an attempt led by Oasis Management to oust Darby. He agreed in November to step down.

Read the article

2/13/2019

Diversity in the 'Man Cave': Boardrooms Gain Women as Minorities Lag

Reuters (02/13/19) Kerber, Ross; DiNapoli, Jessica

Recent data show that while women are gaining more seats in boardrooms, racial and ethnic minorities rarely gets seats at the table. Twenty-seven percent of new directors at companies in the Russell 3000 Index were women during 2016-2018, up from 21% in the previous three-year period, according to estimates by ISS Analytics. Although women are still underrepresented, their gains have been more substantial than those of African-Americans and Latinos. These groups comprised only 5% and 2%, respectively, of new directors in 2016-2018, little changed from the previous three-year period. Dominique Mielle, a white woman who was named a director of REIT Anworth Mortgage Asset Corp. (ANH) in November, said the "Me Too" movement has encouraged boards to add women to their boards. Outside the United States, some countries have quotas for diversity. France requires 40% of board members at its largest listed companies be women, while Germany has a 30% requirement. "All the big holders of securities are focused on gender," said Joe Johnson, a Boston-based partner at the Goodwin law firm who advises corporate boards. "They'll move to minorities next."

Read the article

2/13/2019

Small Companies Face Added Pressure to Put Women on Boards

Wall Street Journal (02/13/19) Broughton, Kristin

There are fewer large public companies with all-male boards as investors in recent years have demanded boardroom diversity. Now, proxy advisors are encouraging community banks, regional energy companies, and other small and midsize enterprises to increase gender diversity on their boards or risk losing shareholder support. Under a policy taking effect this year, Glass Lewis & Co. will recommend that investors vote against re-electing directors who chair nominating committees at companies with all-male boards. The proxy advisory firm said it would target companies in the Russell 3000 Index during annual meeting season. "Companies that don't have women on their boards are outliers," said Courteney Keatinge, senior director of environmental, social, and governance research at Glass Lewis. "And we want to make sure those outliers are called out." Institutional Shareholder Services Inc. plans to implement a similar policy in 2020. According to Glass Lewis, only four companies in the S&P 500 had all-male boards at the end of last year, down from 31 five years earlier. Further, there were 509 companies in the Russell 3000 with male-only boards at the end of the year, down from 708 companies over the same period. Glass Lewis said it will take into account existing efforts at companies to recruit women directors, as well as any agreements companies have in place with significant investors.

Read the article

2/13/2019

The Rise of Women in Corporate Boardrooms

Forbes (02/13/19) Berger, Laura

Columnist Laura Berger details some of the long-term shifts that are building diversity in boardrooms worldwide. She notes that almost 33% of global S&P 500 boards now include three or more females. Furthermore, the ratio of companies with three or more women directors has increased to 29% at the end of last year from 19% in 2015. Institutional Shareholder Services (ISS) has announced its areas of measurement in 2019 will be gender, skills/background, ethnicity, age, and tenure. The proxy advisory and corporate governance firm added that there will also be a keen focus on board diversity. Looking ahead, Berger advocates boards look at whether their proxy statement showcases the board's diversity and discloses diversity goals to help demonstrate the value the board places on diversity, as recently proposed by the EY Center for Board Matters.

Read the article

2/13/2019

The Road Ahead for Shareholder Activism

Harvard Law School Forum on Corporate Governance and Financial Regulation (02/13/19) Weinstein, Gail; de Wied, Warren S.; Richter, Philip

Last year was a record year for activism in terms of number of campaigns, capital deployed, number of activists involved, first-time activists, and board seats obtained. While statistically activism continues to grow, the activist investing market in the United States is mature, with the number of repeat activism targets exceeding the number of first time targets, according to research from Fried, Frank, Harris, Shriver & Jacobson. Activism is concentrated among a small number of leading activists, the significance of board seats won is overstated, non-U.S. activism has slowed, super-cap companies remain infrequently engaged, and returns for activist funds have been low and highly volatile. In response to the expansion of activism in recent years, corporate boards and senior executives now think like activists, institutional investors have become more involved and vocal, and merger and acquisition activity has changed, with the majority of transactions now initiated by a bidder rather than by an engaged company's decision to initiate a sale process. Fried, Frank, Harris, Shriver & Jacobson sees the road ahead containing many pitfalls for activists, including political uncertainty that will drive market volatility and more challenging financing conditions. A significant market disruption or tightening of liquidity could lead to a shakeout among activists and the return of distressed activism. Moreover, M&A-related activism may become more aggressive; activity in environmental, social, and governance is likely to increase; and growth could pick up in Europe and Asia.

Read the article

2/13/2019

Want a Better Board? Look to Private Equity

Institutional Investor (02/13/19) McElhaney, Alicia

Companies that are looking to better align their board with their institutional shareholders and better handle shareholder activism should look to the private-equity model of boards, according to new research from Columbia Law School professors Ronald Gilson and Jeffrey Gordon. In a paper entitled "Board 3.0—An Introduction," the researchers explain that private equity sponsors offer robust incentives, adding that this has resulted in a different mode of board and director engagement that seems associated with high value creation. Gilson and Gordon describe the current board structure of publicly traded companies as Board 2.0, and call for a model that combines these directors with those that follow a new model of corporate governance—Board 3.0. Under the 3.0 model, the 2.0 directors would serve on compliance and special committees, while the new directors would serve on a "strategic review" committee that would monitor the strategy and performance of the company. The 3.0 directors, which would serve a limited time in their role, would be compensated through stocks in a long-term manner. The Board 2.0 is "dominated by part-time independent directors who are dependent on company management for information and are otherwise heavily influenced by stock market prices as the measure of managerial performance," says the paper. The authors express concern that institutions may back up activist hedge funds, which may not be acting in the best interest of shareholders, via proxy votes in the hopes of dissolving a dispute.

Read the article

2/11/2019

Institutional Investors Looking More Closely Into Companies, Boards – Morrow Sodali

Pensions & Investments (02/11/19) Bradford, Hazel

Asset owners and managers continue to "dig deeper" into how their portfolio companies are dealing with issues such as environmental, social, and governance (ESG), executive pay, and activism, and away from compliance checklists, according to Morrow Sodali's Institutional Investor Survey. "Shareholders are increasingly interested in looking at companies on the merits rather than just doing a compliance exercise," said John Wilcox, chairman of Morrow Sodali, a global corporate governance firm, in an interview. The fourth annual survey, released on Feb. 11, asked investors with a collective $33 trillion in assets which issues matter most about the companies they hold. The 46 respondents represent senior governance specialists in their organizations, with $19.5 trillion in active investments and $13.5 trillion in passive ones. Asked to rank the factors that influence their voting decisions, 93% selected governance policies and practices, followed by long-term business strategy and effective communications. On ESG factors, the survey found it is "increasingly being blended into the discussion about what companies are supposed to be doing and how they are judged," Wilcox said. On board engagement, 87% of respondents indicated that "proactive and regular engagement" with the board of directors helps them evaluate a company's culture, purpose and reputational risk. Asked about activist campaigns, the institutional investors said they are most likely to support one when there is a focus on long-term strategy.

Read the article

2/11/2019

Pernod Gets the Gentle Treatment From New York Hedge Fund

Bloomberg (02/11/19) Laurent, Lionel

Although Elliott Management Corp.'s Paul Singer often is portrayed as every CEO's worst nightmare as he pushes for radical changes, his approach has been different at French liquor-maker Pernod Ricard SA (PDRDY). He is taking what Bloomberg columnist Lionel Laurent calls "a more back-seat, common-sense approach that advocates tweaks rather than a structural overhaul." Laurent adds that "judging by the recent board changes at the company and the share-price rise, it is working out for Elliott and Pernod's management." Elliott disclosed its nearly 1 billion euro ($1.1 billion) stake in Pernod Ricard in December, criticizing the family-run company's governance and calling for cost cuts to fix its poor performance versus peers. Thierry Le Clercq, a fund manager at Mandarine Gestion, says Ricard appears unfazed by Elliott's arrival. Meanwhile, Elliott appears not to be especially pushy. According to Laurent, "A refreshed board might give the CEO Ricard more freedom to tackle spending and finally turn the page on the 2008 acquisition of Absolut, which saddled Pernod with debt and hefty write-downs. Ricard himself told Bloomberg News in an interview that family shareholders had been pushing him to stick to the existing strategy 'or else.' So it's interesting that he says he's 'happy' that Elliott is now on the register. As for Singer, he could do with an easy win in Europe that doesn't involve a protracted, politically charged struggle."

Read the article

2/11/2019

Charting the Rise of Europe's Investors

European CEO (02/11/19) Goldsmith, Courtney

Hedge funds have become the face of activist investing, and increasingly they are engaging European companies. In 2016, there were 40 activist campaigns at European firms worth more than €1 billion, up from just six in 2009. JPMorgan said in its report on the 2018 proxy season that Europe had "confirmed its position as a major shareholder activism arena." According to Activist Insight, 128, or 40%, of the 318 non-U.S. campaigns initiated in 2018 engaged European companies. However, Europe still lags behind the United States, where the average number of new campaigns ranged between 300 and 500. The JPMorgan report found that non-European activists were responsible for initiating 43 campaigns in Europe in 2018, up from 39 in 2017, and nearly 75% of those campaigns were said to have been launched by U.S. funds seeking viable engagement outside their oversaturated home market. "Both Corvex Management and Sachem Head launched their first European campaigns this past year, while Trian Fund is said to be raising a U.K.-listed fund to [engage] a European company," JPMorgan said. Meanwhile, local players are now getting involved, with London Business School finance professor Julian Franks noting that over the years, activism has become more acceptable in Europe. "The [engaged companies] are becoming more used to it, more prepared. And I think the activists think, 'Well do we really need to take full-page ads hitting these companies over the head?'" Franks added. "There are a lot of consulting firms who prepare potential [engaged companies] to think through what their activist wants and whether they should do it in advance. That's not at all unusual."

Read the article

2/10/2019

A Wary Welcome for Investors' New Tactics

Financial Times (02/10/19)

This Financial Times editorial notes that during the 1980s, investors like Carl Icahn and Nelson Peltz engaged in short-term tactics, but now, as investor activism is on the rise, firms like Elliott Management, Peltz's Trian, and ValueAct sometimes snap up stakes and settle down for the longer haul, lobbying from inside the boardroom. According to Lazard, there were activist campaigns at 226 larger companies across the globe last year, up 20% from 2017, and activist funds invested a record $65 billion of fresh capital. There looks to be more of the same this year, with Sherborne's Edward Bramson pushing for an overhaul of Barclays (BCS), Paul Singer's Elliott Management taking aim at governance and unsatisfactory profit margins at Pernod Ricard (PDRDY), and ValueAct recently securing a deal with Olympus (OCPNY) to appoint three non-Japanese board directors. This editorial states that "activists' growing maturity ought to be good news for everybody. Activists pose a useful challenge to boardroom smugness. When they do win board seats, they appoint experienced board members, not paid troublemakers. They help regulate the self-aggrandizing tendency of established directors to pursue acquisitions for the sake of it, trading on the inertia of long-term investors. Their willingness to deepen oversight of complacent companies offsets the passivity of many index funds. As a result of activists' engagement tactics, traditional long-term asset managers are having to come off the fence and become more vocal, both about the opinions of the activist campaigners and their own objectives. That said, boards are right to remain wary."

Read the article

2/10/2019

A Rarity On Wall Street: A Female- and Minority-Led Activist Hedge Fund

Wall Street Journal (02/10/19) Lombardo, Cara

The co-founders and managing partners of the new activist fund Impactive Capital LP are Christian Asmar, who is Hispanic, and Lauren Taylor Wolfe. Both spent roughly a decade at activist hedge fund Blue Harbour Group LP before leaving to strike out on their own. Impactive will be shaking up an industry in which less than 5% of hedge funds are owned by women and less than 9% are owned by minorities, according to a recent report from Bella Research Group and the John S. and James L. Knight Foundation. An analysis by the Wall Street Journal last year found that even when women are present in high-level positions at large hedge funds, they are rarely involved in investment decisions. The pair are launching Impactive with $250 million from the California State Teachers’ Retirement System and hope to harness investors’ increased focus on companies’ environmental, social, and governance (ESG) track records and their professed disdain for short-termism. "We have the flexibility, because we have long-term capital, to take a longer-term view," says Taylor Wolfe. Impactive will focus on pushing small- and medium-size companies to make changes such as adding a diverse set of board members, reducing emissions or investing in technology that could hurt returns in the near term but that it believes will pay off over time. It also will employ traditional activist tools such as urging companies to improve capital allocation or spin off noncore businesses. Calstrs has committed the capital for a six-year term.

Read the article

2/8/2019

Funds Turn Attention to Banks as New Merger Wave Sets Up

CNBC (02/08/19) Franck, Thomas

Activist investors are turning up the heat on the U.S. banking industry, which many see as ripe for a new merger wave. Activists often avoid heavily regulated banks, but with the Trump administration and a GOP-controlled Senate trying to ease some of the industry's oversight, the possibility of big bank deals has resurfaced. "We've been seeing activity and clients looking into the banks space for a number of years now," said Schulte Roth & Zabel Shareholder Activism co-chair Ele Klein. "We've been waiting for more activism for a while now: There are too many banks in the U.S. right now and the industry needs consolidation." After BB&T (BBT) and SunTrust (STI) announced their $28 billion all-stock merger on Thursday, the first big bank deal in a decade, activists may be inspired to push other banks as well. ValueAct has already built a stake in Citigroup, saying last year that banks are lower risk "than at any time in our investing lifetimes." Though ValueAct hasn't made public calls for changes, the bank has agreed to give the investor greater insight into its strategy and operations. Many are looking to see combinations of other large regional banks with undervalued stock, including Citizens Financial Group (CFG), KeyCorp, and PNC Financial (PNC-P), said Blue Lion Capital partner Johnny Guerry. "A vibrant M&A market leaves underperforming banks with few excuses to not explore strategic alternatives," Guerry said. For example, "Comerica (CMA) has been pressured by activists over the past few years, and the success of these transactions only augments the legitimacy of the activists' calls to find a partner." Last week, Blue Lion sent a letter to Empire Bancorp (EMPK) calling for a sale, citing poor efficiency ratios and "egregious expense levels."

Read the article

2/7/2019

CEOs Are Opening Their Boardrooms to Hedge Fund 'White Squires' to Keep Other Investors Out

CNBC (02/07/19) Picker, Leslie

Rather than fear interference from Starboard Value's Jeffrey Smith, Papa John's International (PZZA) announced on Feb. 4 that the hedge fund was investing as much as $250 million in the company and that Smith had been named chairman. Smith was named the "investor CEOs fear most" by Fortune magazine four years ago, but Papa John's welcomed him as a means of bringing stability to the company. In a recent CNBC interview, Smith said, "We approached the company and said we want to get involved and we want to help and we want to provide leadership." Also in a CNBC interview, Papa John's CEO Steve Ritchie remarked, "Obviously, we're in a moment of distress here. It's been a difficult year for the brand but we know we have a plan to do the right things to move forward." This concept of an investor as a "white squire" is becoming increasingly popular as the broader shareholder base gains a greater sense of credibility for traditional activists, says Jim Rossman, head of shareholder advisory for Lazard. "It's a new factor on the playing board for public companies," he notes. "We think it's interesting and potentially useful to public companies because it's more long term, it's larger sources of capital, and can even be more creative than what we've had to work with in the past."

Read the article

2/7/2019

Foreign Funds Set Their Sights on Japan's Smaller Companies

Nikkei Asian Review (02/07/19) Anzai, Akihide

Shareholder activism is on the rise in Japan, and investors are starting to look beyond global names to local companies as the push for better corporate governance gathers steam. Fir Tree Partners recently disclosed a 5.1% stake in rail operator Kyushu Railway. The firm is urging the rail company to focus more on shareholder returns, and has proposed that the company buy back 15% of its outstanding shares worth of 90 billion yen. The investor has also proposed introducing stock-based remuneration for management. Japan's corporate governance code was revised last June to urge companies to disclose policies on reducing cross-shareholdings, enhance board structure and consider the cost of capital when making plans, and analysts say the move is starting to pay off. "Foreign investors previously tended to invest only in big companies, such as Toyota Motor or megabanks," said Yuji Kuramoto, head of stewardship at Daiwa SB Investments. "But now, following Japan's reform, they are inclined to invest more in companies that show promise in terms of technology, property and further room for corporate governance reform." Fir Tree began investing in Kyushu Railway in 2016. It was less interested in the company's rail operations, however, than in its property portfolio, according to Fir Tree managing director Aaron Stern. Kyushu Railway has "very, very high-quality real estate," Stern said. He said Fir Tree made its proposals to Kyushu Railway several months ago and recommended that the stock buyback be carried out during the next midterm business plan, which starts in April.

Read the article

2/7/2019

Opinion: Will the Departure of Arconic’s CEO Derail Its Turnaround Plan?

Motley Fool (02/07/19) Whiteman, Lou

Arconic (ARNC) announced early Wednesday that CEO Chip Blankenship is out after barely a year on the job. The sudden departure suggests a broader boardroom battle behind the scenes, writes Motley Fool author Lou Whiteman, and comes barely two weeks after Arconic walked away from talks to sell itself to Apollo Global Management (APO) in favor of remaining independent. Whiteman believes that decision was a long-term win for investors who now have the opportunity to reap the benefits of a turnaround instead of Apollo. Elliott Management, owner of 10.75% of the company as of Sept. 30, was said to strongly favor the transaction, however. Elliott feuded with Blankenship's predecessor, Klaus Kleinfeld, who resigned in April 2017 after the board said he showed poor judgement in his interactions with Elliott. Investors will learn more about what comes next on Feb. 8, when Arconic announces its full-year 2018 results and provides an update on its portfolio review. Whiteman expects the restructuring plan to remain largely intact, and notes the good news for investors is that Arconic still has an impressive set of assets and exposure to long-term growth markets including aerospace. And, according to its now-former CEO, it also has a pretty straightforward path to streamline operations and improve results. Still, the prospect of owning a company where management and a key shareholder are on separate pages is disconcerting, Whiteman writes. Arconic still has issues to resolve, including a substantial debt burden and liabilities due to London's Grenfell Tower fire in 2017. There is also the risk of a global slowdown that would eat into demand. Blankenship's departure and the intrigue surrounding the move are a blow to the case for buying Arconic. However, there is still plenty to suggest that a solid management team can cut significant inefficiencies and over time increase the company's valuation considerably, Whiteman concludes.

Read the article

2/6/2019

The Long View: The Role of Shareholder Proposals in Shaping U.S. Corporate Governance (2000-2018)

Harvard Law School Forum on Corporate Governance and Financial Regulation (02/06/19) Papadopoulos, Kosmas

The number of shareholder proposals related to governance issues peaked after the corporate scandals of the early 2000s, according to research from ISS Analytics. The governance reform initiatives received strong backing from investors, with some proposal categories (declassifying the board, removing supermajority vote requirements, and redeeming or voting on poison pills) consistently obtaining support levels above 60% of votes cast. The percentage of governance shareholder proposals receiving support by majority of votes cast rose steadily from 5% of proposals in 1994 to 37% of voted proposals in 2003, and support levels have remained high since then. Many key governance practices are now widely adopted by large-capitalization companies, which has led proposal campaigns to recently shift to governance topics where shareholders do not appear to have reached consensus, such as shareholders' ability to call a special meeting and the establishment of an independent board chair. Last year, the percentage of majority-supported governance shareholder proposals dropped to its lowest level since 1999. The vast majority of governance shareholder proposals in recent years have been filed by individual investors, such as John Chevedden and James McRitchie. Even with limited resources, proponents can make a significant impact on the market by focusing on large companies. The rise of stewardship among large institutional investors could lead these shareholders to move to advance governance improvements.

Read the article