Shareholder Activism Flash Report: April 2020

Reports and studies — New York, Financial Advisory, Shareholder Activism, Shareholder Advisory

April 01, 2020

Key observations from the report include:

The activism slowdown continues

  • March’s decline in new campaign activity continued in April, with only 8 campaigns initiated and $1.9bn of aggregate capital deployed
  • April's activity was 54% lower than the prior six-month average while capital deployed was 45% lower
  • Drop off in activity especially apparent on a weekly basis with the 4-week rolling average falling from ~7 campaigns in February and ~4 in March to ~2 in April
  • April's muted activity was most profound in the US and Europe, where 3 and 1 campaign were initiated in each jurisdiction, respectively, relative to past six-month averages of ~8 and ~5; by contrast, the 4 new campaigns in APAC in April were in-line with the prior six-month average

Elliott and Starboard have been the most active players in 2020

  • Despite a relatively quiet April, Elliott and Starboard have remained the most active activists in 2020 YTD, with 7 and 3 campaigns initiated this year, respectively
  • Elliott has deployed $5.6bn into new campaigns this year, the most of any activist

Despite a slowing of new campaigns in April, existing campaigns continued to develop as activists seek to realize their value creation thesis

Settlements and Board seats marginally lower compared to recent months

  • April saw 7 campaigns settle (resulting in 11 dissident Board seats) relative to 10 settlements (for 19 Board seats) in March
  • In 2020 YTD, 28 settlements have resulted in 54 Board seats versus 31 and 57 in the prior-year period, respectively
  • As proxy season continues, 50 Board seats at 11 different companies remain “in play”

Activism-driven M&A will likely remain uncertain in the near-term

  • The evolving situation at L Brands, in which the Company is suing Sycamore Partners for backing out of the Barington-driven deal, underscores the near-term challenge activists will face in catalyzing M&A in the current environment
  • With additional deal cancellations likely, it remains to be seen if activists will continue to pursue their original transaction theses, pivot campaign objectives or suspend campaigns altogether

Download the review to read the findings in full.