What the activism world is talking about

Fresh from shopping Whole Foods Market and nibbling at Jack in the Box, Jana Partners has a new stake to talk about – or should that be steak? The activist investor has sunk $140 million into Bloomin Brands, the Australian-themed steakhouse operator named – for outside observers – after a reasonably priced deep-fried onion. On first glance, the company looks about as healthy as its signature dish. Total shareholder return is negative on one- and three-year measures, growth nonexistent, and costs high (though the experience is often the opposite for customers). More than 21% of votes opposed last year’s executive compensation. Jana has ex-Gap CEO Glenn Murphy on board as a consultant and former Dunkin Brands President Neal Yanofsky as a potential nominee for next year’s annual meeting, where two incumbents on the staggered board will face shareholders keen to see what has changed since last time. Will CEO Liz Smith be taken Outback to the woodshed?

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Jana Partners
Image source: Made with Photoshop

What we’ll be watching for this week

  • Will The Children's Investment Fund (TCI) be satisfied with the London Stock Exchange’s explanation as to why it decided to part ways with CEO Xavier Rolet?
  • Will Toshiba’s private placement to foreign funds generate opposition?
  • How will Bloomin’ Brands react to Jana Partners’ disclosure of a new stake?
  • Could AT&T’s legal trouble over its Time Warner deal be an opening for an activist investor?
  • Will the recommendations of ISS Governance, CGI Glass Lewis, Ownership Matters, and the Australian Shareholders’ Association be enough to help struggling Australian retailer Myer succeed in fending off dissident shareholder Solomon Lew’s board nominees at the company’s Friday meeting?

Short update

Activist short sellers who go by a pseudonym outperform those whose identity is known, according to research by Activist Insight to coincide with the launch of its short seller database, Activist Insight Shorts. Stocks targeted by anonymous short sellers declined by an average of 28% in the two years after the campaign became public versus a mere 20% decline over a comparable period for short sellers who operate in the public eye. Perhaps as a result of their predecessor’s success, anonymous short sellers are becoming more commonplace. According to Activist Insight Shorts, 58 campaigns were led year-to-date by anonymous activist short sellers, compared to a record high of 67 last year and just 31 in 2013. The number of campaigns led by known short sellers peaked in 2015 at 215, and declined to 196 in 2016 and 110 year-to-date. To arrange an online demonstration of Activist Insight Shorts, email [email protected] or view our product brochure to find out more.

Article by Activist Insight