10/15/2021

BlackRock Votes Against CBA Resolution

Financial Standard (10/15/21) McArthur, Elizabeth

Despite its vocal stance on sustainability and net zero ambition, BlackRock (BLK) voted against a Commonwealth Bank of Australia (CMWAY) shareholder resolution to stop the bank financing fossil fuels. The largest asset manager in the world voted against a CBA shareholder resolution which asked the bank to stop funding fossil fuel projects. "BIS [BlackRock Investment Stewardship] voted AGAINST the resolution as it is overly prescriptive and risks unduly constraining management's ability to make business decisions," BlackRock said. "Further, the company has demonstrated its commitment to integrating climate risks into its long-term strategy, including TCFD-aligned [task force on climate-related financial disclosures] reporting since 2018 and a stated goal of net zero emissions by 2050." Activist group Market Forces supported the shareholder resolution asking CBA to stop funding fossil fuel projects. "Commonwealth Bank's updated climate policy, published in August 2021, was little more than greenwash and a recipe for climate catastrophe. Despite its commitment to net zero emissions by 2050, the bank watered down an existing (albeit ineffective) barrier to funding expansionary fossil fuel projects and gave climate-wrecking companies at least another four years to continue with business as usual," Market Forces said. According to Market Forces, approximately 15% of CBA shareholders indicated support for the proposal ahead of the annual general meeting. However, BlackRock maintained: "In general, BIS does not support shareholder proposals that we believe to be overly prescriptive and as such, would risk unduly constraining management's ability to make business decisions, as is the case with this resolution."

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10/14/2021

Invesco Tried to Forge Zee-Reliance Merger and Retain Punit Goenka

The Telegraph (India) (10/14/21)

The battle between the founders of Zee Entertainment Enterprises Ltd. (ZEEL) and shareholder Invesco remained in the spotlight on Wednesday after a string of revelations showed that Invesco had tried to mediate a merger with Mukesh Ambani’s Reliance Industries Ltd. (RELIANCE) back in February that promised to retain Punit Goenka as Managing Director and CEO of the merged entity. The Invesco plan offered terms in the proposed merger with Reliance group entities that mirrored provisions worked into the non-binding merger pact reached last month between Sony and Zee. Late in the evening, Reliance distanced itself from the escalating war of words when it admitted that it had been approached by Invesco to discuss a merger but claimed the discussions had broken down over Zee’s demand for the issue of preferential warrants to raise its stake in the merged entity. In his letter to the Zee board, Goenka said he had been approached by Aroon Balani and Bhavtosh Vajpayee, representatives of Invesco Developing Markets Fund and OFI Global China Fund LLC, with the offer of a merger with a “large strategic group.” On Wednesday, Invesco disclosed the strategic group was none other than Reliance. The fund said that its role was only to “facilitate” a possible deal between Reliance and Zee. Invesco, however, rejected claims it had pushed for the transaction at a lower valuation. “We wish to make clear that the potential transaction proposed by Reliance (the strategic group referenced but not disclosed in the 12 October 2021 communication by Zee) was negotiated by and between Reliance and Goenka and others associated with Zee's promoter family. The role of Invesco, as Zee's single largest shareholder, was to help facilitate that potential transaction and nothing more,” the fund said. It added that various sincere efforts were made over the last two years to bring Zee back to good health and that discussions around strategic alignments have been just one part of this effort.

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10/14/2021

Jana Partners Takes Stake in Macy’s, Urges Spin Off of E-Commerce Business

Wall Street Journal (10/14/21) Cimilluca, Dana; Lombardo, Cara

Jana Partners has taken a stake in Macy's Inc. (M) and is calling for the company to spin off its fast-growing e-commerce business, according to sources. Jana Partners on Oct. 13 sent a letter to the retailer's board urging it to separate the online division, which has approximately $8 billion in annual revenue, the sources said. The retailer's e-commerce business has already drawn interest from firms that could invest in it in conjunction with a spinoff, some of the sources said. Jana thinks that a stand-alone e-commerce business would be worth a multiple of Macy's current market value, which stood at about $7 billion on Oct. 14 after a recent rally. Macy's shares have dropped significantly in the past several years, while the valuations of online-only retailers like Farfetch Ltd. (FTCH) and MyTheresa have climbed. Jana hinted at its interest in Macy's at the 13D Monitor Active-Passive Investor Summit in New York last week, suggesting the company should separate out its e-commerce business. Macy's, which also owns the more upscale Bloomingdale's brand, was hit hard last year by the Covid-19 pandemic, which forced the temporary closure of physical stores. Online sales, however, have spiked as more customers shop from home. This is at least the third time Macy's has been engaged in recent years. But in a sign of how much the retail world has changed due to online shopping and the pandemic, investors such as Starboard Value previously urged the company to unlock the value of its real-estate holdings.

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