shareholder activism in 2015 “more activists targeted more companies than ever before” activist...
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Shareholder Activism in 2015
“More activists targeted more companies than ever before” Activist Insight, 2015
March 2015
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2014 saw a surge in activist activity globally and in Australia. The types of activism fell broadly into these categories:
Are you a target?
Board related – removal of NEDs, MDs and entire boards
Other governance issues / Two Strikes
M&A outcomes
Business strategy
Balance sheet
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The Issues that Attract Activists are Varied.
Institutions are actively supporting the activists – at both a portfolio manager AND governance level where they’ve bought into the value of the
alternative strategy.
Environmental, social and governance (ESG) issues are becoming mainstream and activists are banding together with sympathetic funds to press for change.
Two Strikes provides an excellent medium for dissent and first - mover control strategies by activists.
Too many boards are complacent; or fail to
see the risks; or are getting
outdated advice.
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Sometimes they are corporate investors, hedge funds or private equity
Increasingly, they are specialist investors whose purpose in life
is to extract value from any perceived opportunity
Other times they are smart individuals or
boutique funds willing to risk a fight
Activists – who are they?
But also…They are large institutions driven by changing local and global
governance mandates OR significant on-register positions.
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Historically most activist or dissident action in Australia has been confined to smaller caps. Since early 2012 activists have shifted gear. Qantas, Fairfax, Echo Entertainment, Dart Energy, Brickworks/WH Soul Pattinson, Billabong, have all been targeted plus institutional agitation at Westfield Group, Newcrest, Leighton and David Jones.
This follows the pattern of US activism over the last six years. Activism built slowly then picked up considerably from 2012, to the point where some of the largest US corporations have come under attack; Microsoft, Pepsico, Yahoo, Dow Chemicals, Walgreens, eBay, Herbalife & Allergan.
Last year smaller US activist funds looked over the Australian market. With the current AUD margin, many stocks are looking cheap to cross-border predators.
Local activists such as Sandon Capital, Mercantile Investments, Ariadne, Thorney Opportunities Fund, Allan Gray, are cashed up and looking hard for new opportunities.
Foreign-controlled investment banks are working overtime on new activist and M&A projects – some will eventually go public.
What’s Changed in the Local Landscape?
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Practical Steps.
Examine your board Know your shareholder base
Perform financial and peer reviews Assess corporate governance
Develop a communications plan Develop a shareholder…
Assemble your communications team
Develop an activist response manual
…and media engagement strategy
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GPS – Specialists in Defending Activist Campaigns & Proxy Fights
Section II
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GPS provides a suite of tailored services to support a company defending against an activist campaign or proxy fight.
These include:
Our Services.
Strategic & tactical advice
Beneficial owner
profiling
Share register
characterisation
Corporate Governance and Proxy
Advisor Support Program
Corporate Governance
Impact Study
Discrete institutional
& retail shareholder
research
Vote modelling
Proxy solicitation
Bespoke micro
websites
We are happy to discuss our experience and insights
Murray Williams
Activism & M&A
(0411 11 90 90)
Maria Leftakis
Governance & M&A
(0411 275 275)
Andrew Thain
Proxy Fights, Capital Raisings & M&A
(0411 432 221)
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