Shareholder activism on course for its weakest year in Canada since 2011.
The number of Canada-based companies publicly subjected to demands from activist investors is at its lowest level in five years, according to research by data provider Activist Insight.
As of November 25, 44 companies had been targeted in 2016 – a 17% fall from last year’s record-breaking 53 at the same point in the year. In 2015 as a whole, 60 companies were targeted, up from 54 in 2014 and 51 in 2013. Based on trends in prior years, Activist Insight predicts that 2016 will see approximately 49 companies targeted – the first time the number has fallen below 50 since 2011.
The data show a significant drop in activism in both the basic materials and financial sectors compared to previous years. Under 40% of targets were basic materials companies for the first time since 2011, pointing to continued weakness in stocks reliant on commodity prices, while targets in the financial sector fell from an average of 28% of the total to just 16% in 2016.
While board-related activism was slightly down in 2016 to-date (at 46% of all demands, compared to an average 2010-2015 of 50%), M&A activism became more prominent. 18% of all demands were related to M&A, compared to an 11% average.
Commenting on the data, Activist Insight spokesperson Josh Black said, “The continued travails of commodity-dependent stocks and more plentiful opportunities in the U.S. has reduced the number of activist situations in Canada in 2016. Nonetheless, activists from both sides of the border continue to look at Canadian situations and are prepared to strike when the time is right.”
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About Activist Insight
Since 2012, Activist Insight (www.activistinsight.com) has provided its clients with the most comprehensive information on activist investing worldwide. Regularly quoted in the financial press, Activist Insight is the trusted source for data in this evolving space. In 2016, Activist Insight launched Activist Insight Shorts after acquiring Activist Shorts Research. Activist Insight offers four great products: Activist Insight Online, Activist Insight Shorts, Activist Insight Monthly – the world’s only magazine dedicated to activist investing, and Activist Insight Vulnerability – a tool for identifying potential activist targets.