Bankers Warn Corporate Clients to Expect Resurgence in Shareholder Attacks
Financial Times (07/06/20) Walker, Owen; Aliaj, Ortenca
The global health crisis has made companies more vulnerable to external pressure, according to bankers. The coronavirus pandemic has exposed flaws in their business models and depressed their share prices, they say. As a result, bankers are encouraging their corporate clients to prepare for an onslaught of engagement by shareholders. Companies faced a "tremendous" amount of investor engagement following the 2008 financial crisis, says Darren Novak, head of engagement defense at UBS (UBS). Shareholders are waiting for second quarter results to see which companies are vulnerable, he says. "It will be more difficult for companies to defend themselves," says David Hunker, head of shareholder activism defense at JPMorgan (JPM). Private discussions taking place between companies and shareholders are likely to go public in the coming months, adds Pamela Codo-Lotti, head of cross-markets activism and shareholder advisory at Goldman Sachs (GS). In the first six months of the year, 522 companies faced public campaigns, which makes this the quietest start to a year since 2015, according to Activist Insight.
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