Media Center

12/6/2019

Alexion Pharmaceuticals Rejects Elliott Push for 'Proactive Sale'

Reuters (12/06/19) Mathias, Tamara

On Dec. 6, Alexion Pharmaceuticals Inc. (ALXN) said its board of directors has unanimously decided against Elliott Management's call for a "proactive sale" process. "We have recently engaged in good faith with...Elliott Management, to listen to their point of view, including their recommendation that we immediately launch a proactive sale process," Alexion said in a statement. "Consistent with its fiduciary duties, the board unanimously decided that conducting a proactive sale process would not be in the best interest of shareholders." The hedge fund has built a stake in the company and has been pressuring it to take more action to bolster its stock price.

Read the article

12/5/2019

Lagardère Group Chairman Resigns 'For Personal Reasons'

Financial Times (12/05/19) Pooler, Michael

Citing personal reasons, Xavier de Sarrau has resigned as chairman of the supervisory board of Lagardère Group (MMB), a position he had held since 2010. De Sarrau will remain a member of the supervisory board and be replaced as its chairman by Patrick Valroff, who has served on the board for about 10 years. The development comes as the French group crosses swords with Amber Capital, a London-based hedge fund that recently became the group's third-largest shareholder by increasing its stake to 6.8%. Lagardère has shrunk considerably under the leadership of Arnaud Lagardère, who took over the group after the sudden death of his father Jean-Luc Lagardère in 2003. Amber has criticized the firm's corporate governance and tried to oust de Sarrau as chairman at its last annual shareholder meeting, which failed. In the past Amber has pointed to what it sees as a breach of independence at Lagardère's supervisory board. Valroff, the new chairman, has strong links with Crédit Agricole (CRARY), the main lender to Arnaud Lagardère's personal holding company, Lagardère Capital & Management. LC & M, through which Arnaud Lagardère holds a 7.3% stake in Lagardère, had €204 million of debt at the end of 2017, which exceeds the current value of his shares in the group that bear his family's name. In October a French commercial court demanded Arnaud Lagardère publish a decade of annual accounts for LC & M, another of Amber's demands. Arnaud Lagardère has defied the court order and is appealing the decision. Meanwhile, four members of Lagardère’s supervisory board have their mandates coming up for renewal by shareholders next year, and Arnaud Lagardère's own mandate as the group's managing partner is up for renewal by the supervisory board in March 2021.

Read the article

12/5/2019

Enzo Biochem Issues Open Letter to Shareholders

Business Wire (12/05/19)

Enzo Biochem Inc. (ENZ), an integrated diagnostics and life sciences company, has issued an open letter to shareholders. The letter says that the company will hold its 2019 Annual Meeting of Shareholders on Jan. 31, 2020. "This year's meeting is particularly critical, as Harbert Discovery Fund—a short-term oriented activist hedge fund with no experience in our industry—is seeking to replace two highly qualified directors up for election. We have attempted to work constructively with Harbert in order to understand their perspectives and integrate their director nominees into our Board refreshment process. However, they have steadfastly thrown up roadblocks at every step since they made their demands a few months ago. They refused to provide the names of their nominees while simultaneously demanding that the Board replace without shareholder vote two duly elected independent directors with these then-unnamed candidates." The letter also accuses Harbart of seeking to obtain board seats in order to "abandon Enzo's long-term strategy and attempt to drive a fire sale of the Company at depressed valuations."

Read the article

12/5/2019

Investor to Oppose Instructure's Plans to Sell to Thoma Bravo

Reuters (12/05/19) Herbst-Bayliss, Svea

Rivulet Capital has said it will resist Instructure Inc.'s (INST) plan to sell itself to private equity firm Thoma Bravo for $2 billion, calling the deal too cheap and too hurried. Rivulet Capital, which owns 5.23% of Instructure, said it plans to vote against the transaction where Thoma Bravo would pay $47.60 a share for the company. Rivulet is the first large investment firm to speak out on Instructure's plans after other investors had privately and publicly pushed the company to consider selling part or all of itself. On Oct. 31, Sachem Head Capital Management disclosed a stake in the company and started pushing for a full sale process. A few days later Praesidium Investment Management, which has owned the stock for some time, joined the public push for the company to consider a sale. The stock price climbed to $53 a share by late November but tumbled on news of what Thoma Bravo was planning to pay, and now trades at $48.55 a share. Neither Sachem Head nor Praesidium have said how they currently feel about the proposed deal.

Read the article

12/5/2019

The Battle Over Green Investment Is Hotting Up

Financial Times (12/05/19) Tett, Gillian

Christopher Hohn, founder of TCI hedge fund, entered the climate debate this week, announcing that he would engage companies like Airbus (EADSY) and Moody's (MCO) if they failed to improve their standards of disclosure and action over climate risks. Hohn then criticized BlackRock (BLK) for failing to impose equally strict disclosure requirements in its own investments. BlackRock responded to Hohn's attack by saying it "has the largest stewardship team in the world, and engaged 370 companies globally on the topic of climate risk in the past two years." The tussle has generated questions about whether it is possible for the asset management world to fight climate change while the sector is so dominated by passive funds that track indices, rather than active managers. BlackRock has grown largely on the back of exchange traded funds (ETFs) and other forms of passive investing that track the performance of a particular market or sector. Moreover, the ETF sector recently passed the $6 trillion mark, and BlackRock projects this will double by the end of 2023. BlackRock officials argue that if climate activists want to attack finance for its lack of "green" credentials, they should start with the index companies and proxy advisers. However, Hohn contends that asset managers should still insist on screening ETFs for climate issues, possibly using the metrics developed by the Carbon Disclosure Project. Changes at BlackRock are unlikely to be made immediately, and observers say investors should keep an eye out for BlackRock's comprehensive internal analysis of all its operations in relation to climate change, covering both active and passive funds. Further, the World Economic Forum plans to push the world's biggest asset managers to agree on joint standards and commitments for active and passive funds in Davos next month, and European regulators are raising pressure for reform as well, with Brussels preparing a lengthy taxonomy of green standards.

Read the article

12/4/2019

ABB CEO Says More Spin-Offs Possible

Reuters (12/04/19) Revill, John

Peter Voser, chairman and interim CEO of Swiss engineering company ABB Ltd. (ABB), said the company is looking to spin off more businesses. The company is carrying out a strategic review of underperforming businesses and agreed to sell its power grids business last year under pressure from investors to simplify its operations. Voser noted that the synergies between ABB's electrification, industrial automation, drive technology, and robotics divisions are "not so great," but said that a separation of the electrification division, currently ABB's biggest business by sales, was not on the table. Voser's comments, confirmed by ABB, boosted the company's shares by 2.5%, making the stock the biggest gainer on Switzerland's blue chip index. Voser will be replaced by Sandvik (SDVKY) CEO Bjorn Rosengren in February and will return to his role as chairman.

Read the article

12/4/2019

An Overwhelming Majority of Investors Expect Companies to Implement Effective Environmental, Social-Impact and Governance Practices

PR Newswire (12/04/19)

According the 2019 Edelman Trust Barometer Special Report, which surveyed 600 institutional investors in six countries, 84% of investors agree maximizing shareholder returns can no longer be the primary goal of the corporation, preferring a multi-stakeholder approach. Seventy percent of respondents say they believe companies that place too much emphasis on shareholder return will be partially responsible for consumer or employee activism, and 74% say that companies with employee activism are less attractive investments. Almost all respondents expect the board of directors to oversee at least one environmental, social, and governance (ESG) topic, and 52% say tying executive compensation to ESG target performance would positively impact their trust in a company. In addition, 54% of investors say ESG practices positively impact trust, and 61% have increased their investment allocation to companies that excel with regard to ESG factors. Board diversity is also a topic of interest, with 55% of investors saying it has a significant positive impact on trust. Seventy-nine percent of respondents stated that most companies are not prepared to handle activist campaigns, with the main issue an inability to define and specify new and emerging areas of risk and value creation. Ninety-six percent of investors use one or more social platforms on a weekly basis, and 82% of investors consult a company's social media channels when evaluating an investment. Top strategies for underperforming companies to shore up trust with investors include announcing a change to business strategy (52%), conducting a business or strategic review process (51%), and implementing significant cost cuts (46%).

Read the article

12/4/2019

Moral Money: Davos Boss Tells Execs to Align Pay With Stakeholder Interests

Financial Times (12/04/19) Tett, Gillian; Nauman, Billy; Edgecliffe-Johnson, Andrew

World Economic Forum founding Chairman Klaus Schwab has issued a new "Davos manifesto" ahead of January's annual meeting in the Swiss mountain resort. The document unveiled in 1973 stated that "the purpose of professional management is to serve clients, shareholders, workers, and employees, as well as societies, and to harmonize the different interests of the stakeholders." The new document says the purpose of a company "is to engage all its shareholders in shared and sustained value creation." And multinationals must do nothing less than "improve the state of the world." One line may catch the attention of Davos attendees: "executive remuneration should reflect stakeholder responsibility." Meanwhile, a survey of more than 600 investors in the United States, United Kingdom, Canada, Germany, Japan, and the Netherlands by public relations and marketing consultancy Edelman reveals that 84% agreed that companies should balance shareholders' needs with those of their customers, employees, suppliers, and communities. Some 71% of investors said that overemphasizing shareholder returns exposed a company to consumer or employee engagement. More than 60% said they were investing more in companies that excel on ESG standards, 52% said that linking executive pay to ESG targets boosts their trust in a company, and 86% said they would accept lower returns to invest in a company that addressed sustainability or impact investing considerations.

Read the article

12/4/2019

Pershing Square Raises Stake in Howard Hughes Corp.

Reuters (12/04/19) Herbst-Bayliss, Svea

Investor William Ackman's hedge fund Pershing Square Capital Management has raised its stake in real estate company Howard Hughes Corp. (HHC). On Tuesday the investment firm reported that it had increased its stake in Howard Hughes Corp. from 12.6% to 14.8%, which includes 2.2 million shares of common stock and 4.2 million underlying forward purchase contracts. Pershing Square has owned Hughes Corp. shares for years and Ackman chairs the company's board.

Read the article