Shareholder Activism

Starboard gets generous slice of Papa John’s

4 February 2019

The hedge fund is investing $200 mln and taking two board seats in the struggling pizza chain. The price is unambitious and it could ink a return of 6 percent annually. Turnarounds aren’t easy, and Papa John’s needs help. But Starboard is being well paid for its expertise.

Cox: Cannabis and impeachment on readers’ minds

28 January 2019

When asked which investment would outperform in 2019, participants at our Predictions events around the world chose Canadian weed stocks most over other assets. Most also put the chance of Congress impeaching Trump at 30 pct or higher. Consider some other surprising results.

Pernod Ricard takes baby step towards Elliott

24 January 2019

The French spirits maker has named a lead independent director. The increased focus on corporate governance is a welcome start and one of the demands of the activist investor. More radical changes and cost cuts will be needed to close its operating margin gap with rival Diageo.

Arconic lays bare limits of activist minority rule

22 January 2019

Elliott had a hand in appointing most directors, the CEO and the chairman, and encouraged a sale to Apollo. The board has nixed the deal, tanking the stock. Paul Singer’s firm tried to get its way with only a smallish stake; it now owns the company’s problems, not their solution.

Elliott puts eBay’s parts up for auction

22 January 2019

The $30 bln online merchant has a history of spinning off bits of itself. It has, though, missed opportunities in its core business. While the activist may persuade eBay to offload StubHub, for example, the big payoff could be selling the marketplace unit to a buyer like Walmart.

Busy activists navigate tricky currents

22 January 2019

They are rattling the cages of new targets like Pernod Ricard and Campbell Soup. But regular investors are more demanding, and private equity may muscle in, panellists told Breakingviews Predictions events this month. The test is whether active shareholders produce better returns.

Refocused Olympus provides a flash of hope

14 January 2019

As the $13 bln Japanese company turns 100, it is inviting pushy investor ValueAct onto the board, slashing costs and zooming in further on endoscopes and other medical kit. Changing the corporate culture has been a slog, though. A weak camera business also blurs the picture.

Activist too quick to take an ax to Dollar Tree

7 January 2019

Pushy investor Starboard wants control of the $23 bln low-price retailer’s board, and could push for a sale of its Family Dollar chain. Dollar Tree has underperformed peers. But Starboard, which only has 2 pct of the stock, may do better holding tight and waiting for a downturn.

Firearms will test the mettle of woke financiers

2 January 2019

Wall Street dealt gunmakers a blow in 2018 for their part in facilitating gun violence. Yet the wounds were glancing. Investors like BlackRock aren’t especially suited to social activism. Banks, though, have a bigger bully pulpit, and 2019 will bring more reasons to use it.

M&A shops try jumping on activism’s new coattails

21 December 2018

Moelis and PJT are the latest to ramp up shareholder advisory efforts. The rising influence of passive funds mixed with deeper-pocketed investors targeting bigger firms means Corporate America needs more help. Offering defensive advice now can bag lucrative fees down the road.

Sony’s turnaround will be an activist casting call

21 December 2018

Boss Kenichiro Yoshida has boosted earnings at the $61 bln movies-to-video-games group. But he needs to shed a loss-making handset unit and spin off the chip business, among other things. The Japanese company's reluctance to act will see hedge funds make a cameo in Sony's remake.

Vincent Bolloré will break up Vivendi

12 December 2018

The 66-year-old tycoon is smarting from a drubbing by Elliott in Italy, and his media group suffers from a huge conglomerate discount. A partial sale of Universal Music may help. But dismantling the whole group would release $10 bln in value, and keep potential activists at bay.

Pernod Ricard served a shot of Diageo by Elliott

12 December 2018

The French booze group lags its rival on some counts, such as operating margins, but has bested it on others, notably share-price performance. Narrowing the gap on profitability, and improving corporate governance, as the activist urges, are worthy and achievable objectives.

Hyundai heir is tightening his grip on the wheel

12 December 2018

A radical shake-up in the upper ranks of the Korean autos conglomerate should help de facto boss Euisun Chung repair multiple dents. Flagging sales and restructuring demands from activist Elliott are top of his to-do list. A firmer hand should drive progress on both.

Telecom Italia stuck in activist feedback loop

11 December 2018

Top investor Vivendi wants to overhaul the Italian telco’s board months after a coup by rival Elliott. Regaining control looks hard and Elliott would remain a thorn in the French group’s side. Unless the two find common ground, a governance discount will weight on TIM shares.

Yelp activist push is worthy of five stars

10 December 2018

The $3 bln online review site has gone through management fumbles, fierce competition and a slumping share price. No wonder investor SQN is calling for fresh thinking. With Google and Facebook fighting bigger battles, Yelp should be doing better at winning over small advertisers.

Elliott’s best bet with Bayer is a breakup

10 December 2018

Paul Singer’s fund has held a stake in the $66 bln German conglomerate for over a year. Litigation fears have pushed the stock down 40 pct in that time. Convincing Bayer to sell its drug and consumer health units could create value, but means getting Singapore’s Temasek onside.

Holding: Supreme Court due for a dose of activism

10 December 2018

Like a dozy board, the U.S. tribunal has left confusing financial-fraud laws largely untouched for years. Yet a case argued last week - and a new justice - offer the chance to set the rules and Wall Street watchdogs straight. Shaking up the status quo would add value in the law.

Clash of activists could become feature in Japan

6 December 2018

Pushy U.S. hedge fund Elliott voted in favor of $5 bln Alps buying the rest of car navigation systems maker Alpine. Feisty Oasis had long been fighting to block the deal. Such rifts are rare, but may rise in a country where consolidation of affiliates is a growing battleground.

Shell’s climate pay gesture lacks thermostat

3 December 2018

Linking executive bonuses to carbon targets, as the $258 billion giant has pledged to do, should focus bosses’ minds. Yet the goals and sums involved are unclear, and the plan only starts in 2020. Investors can do more to hold energy groups’ feet to the fire on emissions.