Tag archives: Shareholder activism

M&A Activity: 2020 Outlook

J.P. Morgan’s “2020 Global M&A Outlook” (the Report) reviews what we can expect with regards to M&A activity this year. Some of the key takeaways from the Report include:

  • Anticipated Trends in International M&A: We can expect to see an increase in the global M&A market due to greater geopolitical certainty and financially competitive opportunities in regions such as Japan.
  • The Role of Private Equity Firms in the M&A Market: With record levels of capital to deploy, private equity firms will continue to be active players in the M&A market.
  • Shareholder Activism: Shareholder activists will continue to
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A pragmatic approach to climate risk

Climate change is a reality we cannot ignore. Media report season after season record-breaking heat, drought, bushfires, etc. The impact on businesses is real, and investors are increasingly pushing for more detailed disclosure on climate change-related issues.

According to the Wall Street Journal, companies are expected to face 75 climate-related shareholder proposals this AGM season. Generally, the questions investors are asking can be divided into two categories:

  1. What corporate social responsibility initiatives are you adopting to mitigate your company’s contribution to climate change?
  2. Is your company particularly exposed to any risks that climate change is expected to exacerbate?
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Holding up the deal: the threat of “bumpitrage” to M&A

Considering the robust global M&A markets of the last few years, it is unsurprising that activist investors have increasingly sought to leverage these transactions for their own gain. To that end, shareholder activists have developed a variety of M&A-related strategies. Most commonly, they either seek to catalyze transactions by pressuring companies into a merger or acquisition, or to scupper deals that would otherwise have gone ahead. Another commonly-used strategy involves agitating for better deal terms. Often referred to as ‘bumpitrage’, the activist investor purchases shares in a company that is subject to a takeover bid, and then rallies other shareholders … Continue Reading

Look to the future: a tip for analyzing corporate culture in an era of evolving shareholder activism

2018 promises to be a year in which corporate culture will likely become an even more important focal point for investors and activists.

There’s no denying that social media has drastically altered the dynamic for public companies. Today, shareholders are increasingly calling upon corporations to take public stances on various social (and sometimes political) issues, some of which may be wholly unrelated to the corporation’s purpose. In a climate where shareholders are increasingly judging corporations based on non-traditional criteria, public companies can no longer spout platitudes about corporate governance and social values without risking being singled out. More than ever, … Continue Reading

Canadian Securities Administrators are seeking comments on soliciting dealer arrangements

The Canadian Securities Administrators (the “CSA”) have issued CSA Staff Notice 61-303 and Request for Comment – Soliciting Dealer Arrangements (the “Notice”) on the use of soliciting dealer arrangements. “Soliciting dealer arrangements” generally refer to agreements entered into between issuers and investment dealers under which the issuer agrees to pay to the dealers a fee for each security successfully solicited to tender to a bid in the case of a take-over bid, or to vote in favour of a matter requiring securityholder approval. In many cases, the payment of any fee is contingent on “success” and/or … Continue Reading

Shareholder activism in M&A

As noted by Kingsdale Advisors in a recently published report, corporate directors and their legal advisors continue to pay insufficient attention to shareholder activism in M&A. The authors of the 2017 special report caution that not only have shareholder activists been emboldened by post-financial crisis legislative changes that afford shareholders greater say, but that these investors also enjoy access to ever more sophisticated playbooks. Further, they stress that activism in M&A is no longer the exclusive domain of entrepreneurial hedge funds; traditionally passive investors, including large asset managers and even pension funds, are increasingly willing to ensure that their … Continue Reading

What can companies learn from PE sharks?

Divestment is one strategy that a corporation can use to unlock funds for future growth and create long‑term shareholder value. According to a recent E&Y study, a successful divestment must meet three criteria: (i) it must create a positive impact on the valuation multiple of the remaining company; (ii) it must generate a sale price above expectations; and (iii) it must close ahead of its timing expectations. Only 19% of the companies surveyed for the study met all three criteria. Considering that divestiture activities are likely to increase in 2016 (a more detailed discussion on 2016 divestiture outlook can … Continue Reading

What can private companies learn from shareholder activism? Our top 5 tips for companies and boards

As a new year begins, it is always a good time to take stock of the successes of the past year and look forward to doing even better in 2015. Shareholder activism will continue to be a “hot topic” for publicly listed issuers in 2015, but what lessons from the activism arena translate to companies that are not publicly listed? Here is a checklist of our top 5 tips to help ensure a smooth year to come: 

  1. Effective communication of corporate strategy to employees, customers and the public – Having a great strategy that no one knows about will not
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Pre-emptive Defensive Tactics Against Dissidents’ Ambush

This post was contributed by Walied Soliman, Partner, Norton Rose Canada, and Evelyn Li, Associate, Norton Rose Canada

A scan of recent business headlines suggests shareholder activism continues to rise, and even the who’s who of deep-rooted Canadian businesses are not immune.

While preparing for the upcoming proxy season, whether or not your company is at risk for a proxy contest, it might be a good idea to consider adopting certain pre-emptive defensive tactics, including a by-law to provide advance notice for nomination of directors as recently proposed by Arius3D Corp.

Proxy fights

Dissidents in a proxy contest typically look … Continue Reading

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