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Lazard's Annual Review of Shareholder Activism – 2021

Jan 19 2022

Lazard's annual review of shareholder activism compiles and analyzes data on key activism trends

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Key observations from the 2021 report include:

U.S. Activity Leads Global Market

  • 173 campaigns launched globally in 2021, in line with 2020’s slower pace; capital deployed by activists was also roughly flat Y-o-Y ($42bn vs. $40bn)
  • New campaigns launched in the U.S. increased 14% Y-o-Y, and U.S. activity accounted for 55% of all global activism (up from 45% in 2020)
  • The year culminated with a very active Q4 that saw 50 new campaigns launched, resulting in numerous live situations heading into 2022

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  • Elliott launched 17 campaigns, its most active year since 2018, including notable situations at GSK, Duke Energy, Citrix and Willis Towers Watson

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Resurgence of Leading Activists in Europe

  • Following a record 2020, Europe registered 50 new campaigns in 2021, down 12% Y-o-Y but with a strong finish in Q4 with 16 new campaigns
  • Leading large-cap activists are back in Europe, waging 26% of all campaigns (up from 16% in 2020), with Elliott alone launching nine
  • Accounting for 40%+ of all European campaigns, the share of activism in the UK was more than 3x the next most targeted jurisdiction

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M&A-Related Activism Dominates

  • 43% of activist campaigns in 2021 featured an M&A-related thesis, slightly above the multi-year average of 39%
  • Opposition to announced deals was the most common M&A theme, accounting for 19% of all activist campaigns
  • Within opposition campaigns, campaigns seeking sweetened transaction terms were more common and achieved higher rates of activist success than campaigns seeking to call off deals altogether

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Regulatory and Voting Changes Likely to Impact Activism in 2022

  • The SEC’s November adoption of a universal proxy rule is poised to lower barriers to entry for nominations from both traditional activists and other constituencies (e.g., ESG activists, current/former employees). While the rule does not take effect until August 31, 2022, activists could potentially start requesting the use of universal proxies in the upcoming proxy season

Escalation in ESG Activism

  • 2021 saw the rapid proliferation of ESG as a key plank in activists’ platforms. The use of ESG in campaigns ranged from fundamental strategic attacks (e.g., Third Point urging Shell to separate its renewables and refining businesses) to more ancillary “wedge” criticisms intended to curry favor with index funds and other ESG-focused investors

 

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