Activist Insight data shows renewed appetite for large cap targets after tailing off in 2016.
Almost one-in-three U.S. companies publicly subjected to demands by activist investors in the first half of 2017 had a market capitalization of above $10 billion, compared to an average of around 27% between 2013 and 2016.
Over 100 such companies were targeted in the first half of 2017 – exceeding the total of any year since 2010 and crossing a threshold approached in recent years (2015 and 2016 totals were 94 and 96 large cap companies respectively).
U.S. companies targeted by market-cap
|Market-Cap||2013 H1||2014 H1||2015 H1||2016 H1||2017 H1|
Source: Activist Insight Monthly Half-Year Review 2017
The data is among the findings from Activist Insight Monthly’s Half-Year Review 2017, produced in association with Olshan Frome Wolosky. Other findings include:
- The total number of companies targeted was 485, slightly over half of 2016’s total of 806.
- Funds employing activism as a primary or secondary function were less active, targeting just 139 companies so far this year, compared to 188 in 2016 and 184 in 2015 in the same period.
- Despite high profile campaigns at Nestlé and BHP, activism in Europe and Asia appears flat or slightly down.
- The number of proxy fights in the U.S. fell slightly, with management winning a higher proportion than last year.
Activist Insight data show management winning 12 U.S. proxy fights for board representation in 2017 that went to a vote (one less than last year), and dissidents winning at least one seat in seven fights – slightly over half last year's total of 12. Only 23% of contests settled this year, down from 41% in the whole of 2016.
Commenting on the data, the report’s editor Josh Black said, "Activists have responded to a turnaround in the markets by making ever more concentrated bets on large cap companies.
Andrew Freedman, the co-head of Olshan’s Activist & Equity Investment Group, is interviewed in the report and contributes a foreword. Both articles touch on key themes this year, including the rise of large cap activism, social media in proxy fights and aggressive use of corporate bylaws to disenfranchise activists.
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Article by Activist Insight