Shareholder Activism

Elliott pounced on the wrong booze company

4 July 2019

The activist made a 1 bln euro bet on Pernod Ricard in December, arguing the French spirits group could be more profitable and better run. The Absolut maker’s shares have bounced 17% since. That’s about par with the market. But its arch-rival Diageo has done even better.

Carl Icahn lands blow on weakened Occidental

27 June 2019

The activist’s bid to oust four directors at the oil driller over its $38 bln purchase of rival Anadarko is overkill. The board will face a grilling next year anyway. But the rash deal has tested investors’ patience. Oxy might be wise to compromise and give Icahn a partial win.

Bayer takes small steps to placate shareholders

27 June 2019

The German drugs and seeds group has hired an expert adviser for its litigation over weed killer Roundup. That boosts the chances of a swift settlement. Yet, if boss Werner Baumann can’t revive Bayer’s lowly valuation and challenged business, pressure to break it up will grow.

Bowl is half full for Japanese toilet maker Lixil

26 June 2019

Shareholders of the $4 bln company reinstated the former CEO months after he left, and voted for directors he supported. Yet management-backed nominees won seats too. It's a corporate governance win that leaves a large and possibly contentious board to guide Lixil back to profit.

Pride brings out best in self-serving companies

25 June 2019

Big brands are flaunting their support for the LGBT community, including some who once did the opposite. It’s easy to be cynical, but if only short-term profit mattered, such gestures wouldn’t happen. With so much still to do, the support matters more than the motivation.

Greyhound activist gets few scraps from board coup

25 June 2019

Coast Capital failed in its move to revamp the board of FirstGroup, UK owner of the bus operator. True, Chairman Wolfhart Hauser won’t stand for re-election. But the board is mostly unchanged. And, having defeated one revolt, FirstGroup may take longer to break itself up.

U.S. bank shareholders are their own worst enemy

17 June 2019

Hopes of more M&A among the nation’s 5,000 lenders have put high valuations on even ho-hum targets. So buyers often can’t avoid the cardinal sin of diluting book value, even if cost cuts outweigh any premium. A Texas bank’s $2.1 bln takeover of a smaller rival is the latest case.

Dan Loeb pushes a hidden Sony jewel into the light

14 June 2019

The activist behind Third Point wants the $60 bln Japanese conglomerate to spin off its chips business. It's a sensible step to simplify the sprawl, even with trade tensions and cooling tech demand today. Autonomous cars and snazzy smartphones make its long-term prospects shiny.

Nelson Peltz snaps up $16 bln Brexit fixer-upper

13 June 2019

The activist investor has taken a 6% stake in London-listed construction group Ferguson. Selling the UK unit, which has been hit by dismal growth since the country voted to leave the EU, would boost profitability. Relisting in New York could help close a valuation gap with peers.

Thorny Acacia pricks Barrick boss’s Africa bubble

11 June 2019

The bullion miner’s minority shareholders look set to spurn a 226 mln pound bid from its Canadian parent, prolonging a tax row with Tanzania. That’s a blow for CEO Mark Bristow’s status as an African gold guru. His hardball tactics are also unlikely to impress other partners.

Carl Icahn is a problem of Occidental’s own making

31 May 2019

The activist is upset about the U.S. shale driller’s $38 bln purchase of rival Anadarko. Oxy boss Vicki Hollub pulled some shareholder-unfriendly moves, like avoiding a vote, even if Anadarko’s disdain for its owners made her do it. Icahn will be ready to pounce on any missteps.

Greyhound sale is first leg of owner’s long trip

30 May 2019

Under pressure from an activist, Britain’s FirstGroup is selling the iconic U.S. coach group and spinning off its UK bus unit. Simplifying the $1.8 bln group should unlock value. But uncertainty over timing and liabilities means investors are miles away from their destination.

Theme park LBO would be a low-thrills ride

23 May 2019

Activist ValueAct wants $4.3 bln Legoland-operator Merlin to sell itself to private equity. A new owner would need to splash out on fresh attractions and wait years before selling. The modest returns on offer suggest buyout groups won’t be queuing up to get on this rollercoaster.

BP vote pours gas on Exxon’s climate fire

21 May 2019

Owners of at least a quarter of the U.S. oil major’s shares backed the overwhelming vote for more emissions pledges from its UK rival. BP’s support helped, but the result also shows the growing power of climate activists. Exxon’s decision to fight them now looks even more risky.

BP investors take the slow road to climate action

21 May 2019

Shareholders endorsed greater disclosure of the oil major’s compatibility with Paris climate goals, but rejected binding targets. It’s a start, but hardly matches the scale of the problem. Both BP and its owners appear unsurprisingly happy to wait for greater political urgency.

Greyhound breakup is worth the trip

20 May 2019

Activist Coast Capital wants the U.S. coach chain’s parent FirstGroup to spin off its loss-making UK parts and stop bidding for rail franchises. Pension liabilities and valuation debates complicate matters. But even on a pessimistic view, investors could double their money.

Cerberus’s German bank punt looks stuck in Hades

16 May 2019

The U.S. buyout group has seen the value of its stakes in Deutsche Bank and Commerzbank fall by around half and one-third respectively since 2017. Cerberus now needs revenue to rise and costs to drop at both lenders just to break even by 2022. That’s not a foregone conclusion.

Legg Mason checks all boxes for activist interest

15 May 2019

Nelson Peltz is eyeing the underperforming manager of $758 bln of assets. As a mid-sized purveyor of mostly actively managed funds, Legg Mason sits in the industry’s biggest danger zone. High costs offer some low-hanging fruit, but a sustainable turnaround is a tougher challenge.

Toshiba invites foreigners to strut their stuff

14 May 2019

The embattled $18 bln conglomerate nominated four non-Japanese directors to a more independent board. It’s a bold step in a country slowly rethinking corporate governance. Given previous failed experiments with outsiders, Toshiba’s experience will be a litmus test.

Nissan could easily tempt a bold activist

13 May 2019

The $31 bln carmaker is resisting deal talks with Renault. An arm’s-length arrangement favoured by boss Hiroto Saikawa will only weigh on Nissan’s value. Pushy investors have been chipping away at corporate Japan. One able to handle the politics could help make the case for M&A.